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Economic Times
3 days ago
- Business
- Economic Times
Nippon India Taiwan Equity Fund tops return chart with 22% in May. Can the momentum sustain?
Short-term rallies tend to be volatile and unsustainable as they are often event-driven. Nippon India Taiwan Equity Fund emerged as the top performer among all equity funds — including sectoral and thematic — in May, delivering a return of 21.69%. This was out of a universe of approximately 558 funds during the period. Experts attribute this performance to a sharp rally in Taiwanese technology and semiconductor stocks, which benefited from strong global demand for electronics. Also Read | NFO Insight: Nippon Income Plus Arbitrage Active FoF opens. Is it time to add this emerging category to your portfolio? 'Over the past few months, international markets have experienced increased volatility, largely driven by country-specific events. In China, the announcement of a major stimulus package in late September 2024 sparked a sharp market rally. Similarly, in the U.S., post-election speculations, tariff wars, trade deals, etc. ,increased market activity,' Chirag Muni, Executive Director, Anand Rathi Wealth Limited, shared with to Chirag Muni, short-term rallies tend to be volatile and unsustainable as they are often event-driven. Over the long term, Indian markets have outperformed international funds, offering higher return potential and a broader range of investment categories."Indian markets offer easier access to data and are simpler to track, making them more suitable for investors. Given the complexity of global markets, well-diversified domestic funds remain the better choice for investors,' he added. Another expert highlights four key factors influencing a fund's performance: returns relative to the underlying index, currency movements, the performance of the Indian rupee against the U.S. dollar, and the fund manager's value addition. There is a high correlation of Taiwan stocks with the US Nasdaq Composite index as TAIEX's 50–60% weightage is in semiconductors and electronics (e.g., TSMC, Hon Hai), aligning closely with the Nasdaq's tech-heavy composition, he added. 'Both indices are highly sensitive to global chip demand and U.S. tech sentiment, amplifying their correlation. For the month of May, Nasdaq gained 9.56%, which led to accelerated gains in Taiwan-based technology companies in the portfolio,' Atul Shinghal, Founder and CEO, Scripbox, shared with ETMutualFunds. As per the last data available, Nippon India Taiwan Equity Fund had an AUM of Rs 276 crore as on April 30, 2025. Launched in December 2021, the scheme is managed by Kinjal primary investment objective of Nippon India Taiwan Equity Fund is to provide long-term capital appreciation to investors by primarily investing in equity and equity-related securities of companies listed on the recognised stock exchanges of Taiwan, and the secondary objective is to generate consistent returns by investing in debt and money market securities of were around 65 international funds in the mentioned time period, of which 11 offered double-digit returns, 52 offered single-digit returns, and only two gave negative returns. Also Read | Should you consider starting SIP or lumpsum in a momentum index fund right now? Invesco India - Invesco Global Consumer Trends FoF offered the second highest return of around 15.70%, followed by DSP US Flexible Equity FoF and Edelweiss US Technology Equity FOF, which gave 13.90% and 12.09% returns respectively in the double-digit performers, the last five were Nasdaq-based funds, which gave returns ranging from 10.25% to 11.47% in looking at the performance of these international funds, Chirag Muni advises that investors should avoid reacting to short-term trends and instead focus on fundamentals and long-term growth, as over the longer horizon, Indian markets have delivered stronger the other hand, Shinghal believes that the technology sector, as represented by the Nasdaq Composite Index, remains the main driver for the performance of Taiwanese Stocks, and the outlook for the technology sector remains positive in the long run as current and future innovations are either driven or enabled by this sector. In the current calendar year so far, international funds have offered up to 29% return with Edelweiss Europe Dynamic Equity Offshore Fund being the top performer with 29.12% return in 2025 so far. Mirae Asset Hang Seng TECH ETF FoF has given a 20.17% return in the current calendar year so far. In 2025 so far, Nippon India Taiwan Equity Fund has offered a negative return of 3.47%. Shinghal of Scripbox believes that global equities outside the U.S. and India are currently trading at more attractive valuations. Historically, non-U.S. markets have outperformed during periods of U.S. dollar weakness. 'Hence, International Funds (especially Non-US) should get allocation in an Investor's portfolio depending on risk appetite,' he the expert from Anand Rathi Wealth Limited firmly recommends not to invest in international funds, but if one looks for global diversification in the portfolio, can explore only upto 5 -10% of the overall portfolio, however it is important to look at the risk adjusted return potential of the respective country before investing. 'Investors can consider investing across the range of domestic diversified equity funds to get exposure across the range of categories and sectors to generate good alpha and returns in the long term,' Chirag should always consider their risk appetite, investment horizon and goals before making any investment decision. ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@ alongwith your age, risk profile, and twitter handle
Economic Times
28-05-2025
- Business
- Economic Times
Defence sector based mutual funds rally up to 60% in 3 months. Will the momentum continue?
Defence sector based mutual funds have rallied upto 60% in the last three months. There are around six funds in the category including active and passive and gave an average return of 57.70% in the same period. Three schemes in the category gave over 60% return. Motilal Oswal Nifty India Defence ETF offered the highest return of around 60.49% in the last three months, followed by Motilal Oswal Nifty India Defence Index Fund which gave 60.23% return in the same period. Also Read | Defence ETFs gain 17% in one week. Should you add to your portfolio? Groww Nifty India Defence ETF and Aditya Birla SL Nifty India Defence Index Fund gave 60.12% and 59.96% returns respectively in the similar time period. Groww Nifty India Defence ETF FOF gave 59.45% return in the mentioned time period. HDFC Defence Fund, the only active fund based on the defence sector, delivered 45.93% return in the mentioned period. Experts attribute this surge to a combination of strong earnings delivery by the sector constituents, policy momentum with increased capital allocation by the Indian government and trigger coming from actual use case of India's Defence Capability in recent India-Pakistan faceoff at borders.'Key holdings in defence index funds reported strong earnings growth. The Indian defence budget allocation for FY25 has maintained a sharp focus on indigenization. Capital outlay of Rs 1.72 lakh crore continues to support new orders. Defence exports reached an all-time high of Rs 21,083 crore in FY24 (up 12% YoY), reflecting rising global demand for Indian defense manufacturing. This surge in earnings, coupled with a policy push and a favorable geopolitical backdrop, led to substantial price rerating and fund outperformance,' said Atul Shinghal, Founder and CEO, Scripbox. In addition to these factors, another expert adds that Defence funds have benefited from the recent surge in prices of defence stocks. Defence stocks have been on the rise in recent months after they were hit badly during the sell-off earlier this year. 'Many countries around the world, including India are ramping up their military capabilities, leading to increased defence spending. In India, this trend was further strengthened post the Operation Sindoor, as the Indian government plans to further improve our defence capabilities,' said Nilesh D Naik, Head of Business – Investments, the last six months, defence based passive funds returned 34% with Motilal Oswal Nifty India Defence ETF being the topper as the fund delivered 34.22% return in the last six months, followed by Motilal Oswal Nifty India Defence Index Fund which gained 33.73% in the same Nifty India Defence ETF FOF gave 33.35% in the last six months. HDFC Defence Fund, the only active fund based on this sector, gave 15.86% return in the same period. Also Read | HDFC Defence Fund increases stake in HAL, Solar Industries, and 4 other stocks in April Despite seeing the historical stellar performance by these funds, experts don't recommend investing in these sectoral funds. Shinghal of Scripbox mentions that despite strong sector fundamentals, current valuations are stretched as the trailing P/E ratio of the Motilal Oswal Nifty India Defense Index stands at a steep 61.35x, while the P/B ratio is 13.22x—significantly higher than broader market averages. which in turn indicates that the future growth might be already priced further adds that the Sharpe Ratio is negative (-0.07), indicating poor risk-adjusted return over recent volatility, despite high absolute returns and the index has 77.5% exposure to mid and small caps, which increases vulnerability to sharp corrections during risk-off sentiment willing to allocate or have existing investments in these funds can follow the strategy Shinghal shared. He mentioned that existing investors should hold and consider profit booking in a staggered manner, new investors should avoid fresh lump-sum allocations and tactical SIPs may be considered only on 10–15% corrections, and lastly the total allocation to defence sector should be between 2-4% and should not exceed 4% of total equity the other hand, Naik advices that thematic funds such as this are typically meant for seasoned investors who have their core portfolio in place and who want to take a tactical bet based on their views on a specific sector or theme. 'With recent rally in defence stocks, many of them have now recovered significantly and are trading at close to their all time highs. While the long term defence sector story seems strong, investors should be extremely cautious while investing in such funds post this rally, given the current valuations,' he earlier analysed that in a week's time, defence sector based ETFs have gained upto 17% in one week's time. The focus on defence stocks came after reports that the Modi government has called a meeting with defence makers post the recent India-Pakistan faceoff at the stellar performance of defence funds, Shinghal comments on the outlook for the sector and mentions that while India's long-term defense growth story is intact, current valuations do not offer a favorable risk-reward for fresh allocations and investors are advised to retain moderate exposure (up to 4%), book profits where returns have exceeded expectations, and re-enter during valuation corrections or policy-driven should always choose a scheme based on risk appetite, investment horizon, and goals. (Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times) If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@ alongwith your age, risk profile, and Twitter handle.
Time of India
28-05-2025
- Business
- Time of India
Defence sector based mutual funds rally up to 60% in 3 months. Will the momentum continue?
Defence sector based mutual funds have rallied upto 60% in the last three months. There are around six funds in the category including active and passive and gave an average return of 57.70% in the same period. Three schemes in the category gave over 60% return. Motilal Oswal Nifty India Defence ETF offered the highest return of around 60.49% in the last three months, followed by Motilal Oswal Nifty India Defence Index Fund which gave 60.23% return in the same period. Best MF to invest Looking for the best mutual funds to invest? Here are our recommendations. View Details » by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Hoa Binh: Unsold Furniture Liquidation 2024 (Prices May Surprise You) Unsold Furniture | Search Ads Learn More Undo Also Read | Defence ETFs gain 17% in one week. Should you add to your portfolio? Groww Nifty India Defence ETF and Aditya Birla SL Nifty India Defence Index Fund gave 60.12% and 59.96% returns respectively in the similar time period. Groww Nifty India Defence ETF FOF gave 59.45% return in the mentioned time period. Live Events HDFC Defence Fund , the only active fund based on the defence sector, delivered 45.93% return in the mentioned period. Experts attribute this surge to a combination of strong earnings delivery by the sector constituents, policy momentum with increased capital allocation by the Indian government and trigger coming from actual use case of India's Defence Capability in recent India-Pakistan faceoff at borders. 'Key holdings in defence index funds reported strong earnings growth. The Indian defence budget allocation for FY25 has maintained a sharp focus on indigenization. Capital outlay of Rs 1.72 lakh crore continues to support new orders. Defence exports reached an all-time high of Rs 21,083 crore in FY24 (up 12% YoY), reflecting rising global demand for Indian defense manufacturing. This surge in earnings, coupled with a policy push and a favorable geopolitical backdrop, led to substantial price rerating and fund outperformance,' said Atul Shinghal, Founder and CEO, Scripbox. In addition to these factors, another expert adds that Defence funds have benefited from the recent surge in prices of defence stocks. Defence stocks have been on the rise in recent months after they were hit badly during the sell-off earlier this year. 'Many countries around the world, including India are ramping up their military capabilities, leading to increased defence spending. In India, this trend was further strengthened post the Operation Sindoor, as the Indian government plans to further improve our defence capabilities,' said Nilesh D Naik, Head of Business – Investments, In the last six months, defence based passive funds returned 34% with Motilal Oswal Nifty India Defence ETF being the topper as the fund delivered 34.22% return in the last six months, followed by Motilal Oswal Nifty India Defence Index Fund which gained 33.73% in the same period. Groww Nifty India Defence ETF FOF gave 33.35% in the last six months. HDFC Defence Fund, the only active fund based on this sector, gave 15.86% return in the same period. Also Read | HDFC Defence Fund increases stake in HAL, Solar Industries, and 4 other stocks in April Despite seeing the historical stellar performance by these funds, experts don't recommend investing in these sectoral funds. Shinghal of Scripbox mentions that despite strong sector fundamentals, current valuations are stretched as the trailing P/E ratio of the Motilal Oswal Nifty India Defense Index stands at a steep 61.35x, while the P/B ratio is 13.22x—significantly higher than broader market averages. which in turn indicates that the future growth might be already priced in. He further adds that the Sharpe Ratio is negative (-0.07), indicating poor risk-adjusted return over recent volatility, despite high absolute returns and the index has 77.5% exposure to mid and small caps, which increases vulnerability to sharp corrections during risk-off sentiment phases. Those willing to allocate or have existing investments in these funds can follow the strategy Shinghal shared. He mentioned that existing investors should hold and consider profit booking in a staggered manner, new investors should avoid fresh lump-sum allocations and tactical SIPs may be considered only on 10–15% corrections, and lastly the total allocation to defence sector should be between 2-4% and should not exceed 4% of total equity exposure. On the other hand, Naik advices that thematic funds such as this are typically meant for seasoned investors who have their core portfolio in place and who want to take a tactical bet based on their views on a specific sector or theme. 'With recent rally in defence stocks, many of them have now recovered significantly and are trading at close to their all time highs. While the long term defence sector story seems strong, investors should be extremely cautious while investing in such funds post this rally, given the current valuations,' he added. ETMutualFunds earlier analysed that in a week's time, defence sector based ETFs have gained upto 17% in one week's time. The focus on defence stocks came after reports that the Modi government has called a meeting with defence makers post the recent India-Pakistan faceoff at borders. Post the stellar performance of defence funds, Shinghal comments on the outlook for the sector and mentions that while India's long-term defense growth story is intact, current valuations do not offer a favorable risk-reward for fresh allocations and investors are advised to retain moderate exposure (up to 4%), book profits where returns have exceeded expectations, and re-enter during valuation corrections or policy-driven consolidations. One should always choose a scheme based on risk appetite, investment horizon, and goals. If you have any mutual fund queries, message on ET Mutual Funds on Facebook/Twitter. We will get it answered by our panel of experts. Do share your questions on ETMFqueries@ alongwith your age, risk profile, and Twitter handle.
Time of India
26-05-2025
- Business
- Time of India
5 behavioral biases to avoid while investing: Here's how they are negatively impacting your investments
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Popular in Wealth 1. FD rate up to 9.1% for senior citizens investing for 5 years; Know the list of banks HOT HAND FALLACY Tired of too many ads? Remove Ads HINDSIGHT ANCHORING RECENCY BIAS LOSS AVERSION Even in calm markets, it doesn't take much to sway investors when it comes to buying or selling decisions. Even as they believe they are in control, they are swirled around by a plethora of emotions and prejudices. Expectedly then, any volatility, as is being witnessed in the Indian markets now, can send them into a tizzy of cognitive and emotional biases that can result in flawed decisions and financial losses 'Behavioural biases aren't flaws in intelligence, but shortcuts the brain uses to deal with uncertainty. During highstress moments, these shortcuts can lead to poor decisions,' affirms Dr Prerna Kohli, Clinical Psychologist & Founder, MindTribe.'This results in mistakes like panic selling, timing the market, over-leveraging, ignoring diversification and neglecting the fundamentals,' says Atul Shinghal, Founder and CEO, it's not easy to completely shrug off deep-seated cognitive biases , being aware of these and making a conscious effort to avert set responses can help mitigate their impact to a certain extent. 'Recognising your mental biases isn't weakness; it's the first step towards making calm, conscious financial choices,' says are some biases that come into play during market volatility and the ways you can avoid psychologist Prerna Kohli explains how to navigate impulses during you anxious, overconfident, or reacting to regret? Labelling the emotion helps reduce its grip and gives time to not react instantly. Give yourself time before making financial decisions during volatile you feel thrown off by the market, go back to your original plan and use your financial goals as a compass.A financial adviser can help separate emotion from strategy and lend objectivity to term 'hot hand' is derived from basketball, where a shooter is considered more likely to score in the future if he has been successful in the past. First used in 1985 by behavioural scientists, Amos Tversky, Thomas Gilovich and Robert Vallone, this cognitive bias makes one predict future success based on previous bias makes people believe that just because a stock or asset has done well in the past, it will continue to do well in the future. 'This leads to chasing overvalued assets, buying at peaks, ignoring risks, and overtrading, especially when volatility amplifies short-term gains,' says of relying on a small data set from the recent past, pick a bigger sample size because figures and statistics can change rapidly during volatility. Conduct your own research and analysis to predict future outcomes, and always stick to fundamentals instead of blindly chasing recent is the tendency to choose a larger variety of options while making a simultaneous decision, and lesser variety while making a separated, sequential decision. 'Psychologically, it stems from the need to feel 'covered' or 'safe' even if the actual risk isn't reduced,' says bias shows up especially during volatility when investors, in a hurry to reduce risk, pile up multiple investments intending to diversify their portfolios. So they may invest in multiple mutual funds, even though all of these have an exposure to the same universe of stocks. 'Overdiversification also prevents capitalising on high-conviction opportunities during volatile dips, as it spreads the capital too thinly,' says the risk-reward profile of each investment option instead of buying a large basket of seemingly diverse cognitive bias makes people believe that they knew more about the event after it occurs than they did before it happened. This makes them overestimate their ability to foresee future events and take wrong decisions based on flawed volatility, people become anchored to a dip or correction and believe they can predict such a future event, often leading to incorrect estimates and wrong investing decisions. This could result in not selling during volatility or buying overvalued not to be overconfident in your predictions during volatility and stick to long-term perspective when it comes to buying or selling cognitive bias makes people take decisions on the basis of immediate or recent events, instead of taking a long-term view, distorting their perception and decision-taking volatility, this bias shows itself in panic-selling after temporary dips or avoiding the markets after a crash. 'A few days of market volatility can overshadow years of stable returns. This distorts risk perception and leads to impulsive shifts in strategy,' says to your financial goals and long-term strategy, instead of being swayed by short-term noise. 'Also study historical recoveries, like Sensex's post-2008 rebound, and stick to dollar-cost averaging to buy during volatility,' advises bias makes the emotional impact of a loss more painful than the joy of a similar gain, forcing investors to stick to loss-making decisions just to avoid market dips, this pain can drive investors to sell too quickly, just to relieve anxiety. 'For instance, in 2023, during a volatile Adani Group stock crash (~30% drop), many Indian investors sold holdings like Adani Ports out of fear, missing a 20% rebound within months,' says your investments periodically with a long-term perspective and weed out underperformers in line with your financial goals.
