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Time of India
23-05-2025
- Business
- Time of India
International mutual funds rally up to 12% in one month. Time to go global?
Being the only category to offer double-digit returns in the past month, international mutual funds have outperformed domestic equity mutual funds. International funds have offered an average return of around 11.68%, whereas domestic mutual fund categories have offered average return ranging between 0.47% to 8.37% in the mentioned period. There were 20 equity mutual fund categories including sectoral and thematic funds in the said period. Also Read | MF Tracker: Can this mega largecap fund add stability to your portfolio in volatile market? Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track default , selected Picture-in-Picture Fullscreen This is a modal window. 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View Details » by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like The Cost of Dental Implants in Bishoftu Might Surprise You Dental implant | Search Ads Learn More Undo An expert noted that these gains were driven by geopolitical developments such as the Trump tariff announcements and trade deals. In recent months, international markets have seen increased volatility, influenced by country-specific events—for example, China 's major stimulus package announced in late September 2024 triggered a sharp market rally. Similarly, in the U.S., post-election speculation, tariff wars, and trade negotiations have heightened market activity. Commenting on domestic funds performance against stellar performance by international funds, Chethan Shenoy, Executive Director & Head - Product & Research, Anand Rathi Wealth Limited mentioned that such short-term rallies are often volatile and unsustainable as they are event driven, over a longer horizon, Indian markets have delivered stronger performance- Nifty 50 has a 5-year CAGR of 22.22%, while international funds averaged 14.58%. Live Events 'Actively managed funds such as Flexi Cap, Multi Cap and Large & Mid Cap funds have done even better, delivering 24.26%, 28.44% and 26.93% respectively, outperforming the index itself over the same 5-year timeline,' he added. Shenoy further adds that when we look at the long-term risk-adjusted returns of global markets, the U.S. and Indian markets have shown better efficiency compared to China, Hong Kong and Japan, whereas the domestic funds, on the other hand, have higher return potential with a wide range of categories to pick from. '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.' Among the 65 international funds, Nippon India Taiwan Equity Fund offered the highest return of around 29.51% in the said period. Invesco India - Invesco Global Consumer Trends FoF and Mirae Asset Global X Artificial Intelligence & Technology ETF FoF offered 23.18% and 21.51% returns, respectively in the mentioned period. Four international funds gave negative returns in the last month. ICICI Pru Strategic Metal and Energy Equity FoF lost the most of around 2.13%, followed by Axis US Treasury Dynamic Bond ETF FoF which lost 1.15% in the same period. DSP US Treasury FoF and Aditya Birla SL US Treasury 3-10 year Bond ETFs FoF lost 0.99% and 0.11% respectively in the same period. Also Read | Mutual funds for beginners: What strategy should students adopt to start investing? Among the 20 domestic equity mutual fund categories, banks and financial services funds have offered the lowest average return of around 0.47% in the last one month. Large cap funds gave an average return of around 2.40% in the same period and flexi cap funds gave 2.90% average return in the mentioned period. The large & mid-cap funds offered an average return of 3.27%, and multi cap funds gave 3.49% average return in the similar time frame. In the last one month, small cap funds delivered 4.15% average return whereas mid cap funds gave 4.70% average return. Auto sector based funds gave the highest average return of 8.37% in the same period. Even after international funds have delivered a stellar performance in the last one month over domestic funds, the expert doesn't recommend investing in international funds, but if one looks for global diversification in the portfolio, they can explore only upto 5 -10% of the overall portfolio. '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,' Shenoy recommended. In the last month, Nasdaq has gained 18.91%, followed by DAX, which gained 13.75% in the same period. S&P 500 gained 13.31% in the mentioned period. The Hang Seng index went up by 11.337% in the same period. Dow Jones in the said period gained 9.67%, followed by NYSE, which gained 8.74% in the same period. The Indian benchmark indices - Nifty50 and BSE Sensex- went up by 2.85% and 2.76% respectively in the same period. After seeing the performance of international funds, investors wonder when and how they should review their portfolios if this gap continues between the global and domestic funds. Also Read | Why retail investors should consider STPs during volatile markets To answer this question, Shenoy said that several global and external factors drive international markets, making it difficult for investors to track and make informed decisions. 'As per the IMF projections, India is set to grow at 6.2 to 6.3% in the coming years, which is the highest among the developed economies and emerging ones like China. Inflation is under control with CPI at 3.14% for April, the lowest in six years and below the RBI's target. The interest rate environment is favourable, with lower inflation, controlled fiscal deficit, and anticipation of rate cuts pointing to a downward trend in rates.' 'April 2025 witnessed GST collections reaching an all-time high of Rs 2.37 lakh crore, reflecting strong consumption and economic momentum. The fiscal outlook remains stable, with the fiscal deficit for FY26 projected at 4.4%, supported by robust revenue generation from direct taxes.' Considering these factors, Shenoy advises not allocating a significant portion to international funds. International funds cater to different broad international markets, commodities, foreign indices, among others, and to sum it up, the performance of the scheme will depend on under which geography your money is invested. That means you should pay extra attention to your investments in international funds. Pay extra attention to which geography or indices you are investing in. One 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
30-04-2025
- Business
- Time of India
Should you buy gold this Akshaya Tritiya? Avoid investing in gold purely based on its recent performance - here's why
Gold's ability to deliver high long-term returns significantly declines over time. (AI image) By Chethan Shenoy Gold buying on Akshaya Tritiya : Traditionally, Gold has always been considered a safe haven asset for investors, offering protection during times of uncertainty. But it is important to understand that it a sentiment driven asset. The price of gold is not driven by underlying fundamental metrics, but by demand and supply. Gold has a tendency to perform in cycles and its recent performance has come in the last 5 years due to global uncertainty, rising inflation, geopolitical tensions, and strong central bank demand. Investors tend to purchase based on recent performance, exhibiting recency bias, which often leads them to buy at the peak. They should avoid investing in Gold purely based on its recent performance. We analysed the different probabilities of CAGR of Nifty vs. Gold over different time frames: Probability of Return 5 year 7 year 10 year 15 year Nifty >10% 66.05% 62.48% 62.17% 63.18% >12% 41.81% 34.34% 38.07% 23.74% Gold >10% 49.73% 29.16% 13.53% 60.38% >12% 38.05% 16.92% 0.58% 0.00% Gold's ability to deliver high long-term returns significantly declines over time. The chance of earning over 12% CAGR from gold is just 0.58% over 10 years and drops to 0% over 15 years. Despite similar volatility to equity, its long-term upside is limited, making it less rewarding on a risk-adjusted basis. In comparison, Nifty delivers more than 12% CAGR in 38% of 10-year cases and 24% of 15-year cases, making it a more dependable choice. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Google Brain Co-Founder Andrew Ng, Recommends: Read These 5 Books And Turn Your Life Around Blinkist: Andrew Ng's Reading List Undo It is far more consistent across 5, 7, 10, and 15 years. Also Read | India has the world's 7th highest gold reserves! Why is RBI buying gold and how does it help the Indian economy? When considering long-term wealth creation, Nifty maintains a much stronger probability of beating inflation and compounding wealth versus Gold, which becomes highly unreliable over time. Therefore, while gold can help hedge risks, over-reliance may limit growth. We recommend a portfolio with 80:20 in equity to debt. Thus, investing in Gold this Akshaya Tritya is not recommended. If you still wish to invest in gold, invest only via Gold ETFs , and not FoFs or any other mode, and keep exposure to 5-10% of your total portfolio. (Chethan Shenoy is Executive Director & Head - Product & Research, Anand Rathi Wealth Limited) Stay informed with the latest business news, updates on bank holidays and public holidays . Master Value & Valuation with ET! Learn to invest smartly & decode financials. Limited seats at 33% off – Enroll now!
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Business Standard
29-04-2025
- Business
- Business Standard
New Nippon funds close April 30, experts say tread with caution
Nippon India Asset Management has launched two new index funds, Nippon India Nifty 500 Quality 50 Index Fund and Nippon India Nifty 500 Low Volatility 50 Index Fund on April 16, 2025. Aim is to deliver cost-effective, diversified exposure to the Indian equity market. Market watchers are debating whether these passive products offer enough value for retail investors rushing to invest before the April 30 closing date. Chethan Shenoy, executive director and head of product & research at Anand Rathi Wealth Limited, weighs in, calling for 'cautious optimism' and a deeper understanding of these funds' structures. Two Indices, Two Themes The Quality 50 Index Fund will track top companies from the Nifty 500 that exhibit strong fundamentals --companies with high return on equity (ROE), solid earnings, and low debt. In contrast, the Low Volatility 50 Index Fund targets companies with the least price fluctuation over the past year. 'It focuses on price stability,' Shenoy explains, 'Ideal for investors wary of market swings.' Though passive funds typically boast lower expense ratios, Shenoy warns against equating low cost with high performance. These funds will only rebalance twice a year. Underperformers may stay in the portfolio longer due to this rigid structure. Historical performance has been inconsistent. 'Out of the last six years, these strategies delivered alpha in only three,' he notes. Who Should Invest? Despite a low minimum investment of ~1,000, Shenoy suggests retail investors tread carefully. 'NFOs often lack a proven track record. It's safer to go with funds that have been tested across market cycles,' he advises. Strategy Over Hype
Time of India
22-04-2025
- Business
- Time of India
Sensex close to 80,000: Should you book profits or hold your mutual fund investments?
With the benchmark index Sensex reaching the 80,000 level, the market expert recommends that while the rally has been broad-based and swift, the market doesn't appear irrationally exuberant yet. 'With earnings season underway and key large caps delivering, the momentum may continue in the near term. However, given the sharp rise in a short span, some moderation or consolidation is possible. Booking partial profits or rebalancing to maintain asset allocation discipline makes sense. That said, India remains a structural growth story, and long-term investors could still benefit from staying invested — especially if they are diversified across sectors and market caps,' Sagar Shinde, VP of Research at Fisdom, recommends. Another expert asks investors to understand why they are booking in the first place, whether this is a part of an annual rebalancing strategy or is it just to capture short-term gains, and if it is the latter, then there is no strategy behind the exits, which can be quite dangerous. Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track default , selected Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. 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 Free P2,000 GCash eGift UnionBank Credit Card Apply Now Also Read | MF Tracker: This largest midcap mutual fund outshines across horizons. Will the streak continue? 'Therefore, investors should build a strategy instead of thinking from a short-term outlook or focusing solely on booking profits or capturing upside potential. One should build a long-term investment strategy and stay invested,' recommended Chethan Shenoy , Director & Head - Product & Research, Anand Rathi Wealth Limited Live Events 'Maintain an asset allocation of 80% equity and 20% debt for long-term wealth generation. Diversify across sectors and market caps: Large (55%), Mid (23%), Small (22%). Continue SIPs to benefit from rupee cost averaging and market dips. Review and rebalance your portfolio regularly to maintain the target asset allocation. Base investment decisions on research, not market noise,' he added. Benchmark index - BSE Sensex - touched its all-time high level on September 27, 2024. It touched a level of 85,978.25. Now with the benchmark reaching a level of 80,000, Shinde recommends that investors can focus on large-cap and flexi-cap funds, which are benefiting from leadership in banking, capital goods, telecom, and consumption themes and since large caps are driving this phase of the rally, pure large-cap funds are relatively safer while still offering upside. 'Additionally, banking & PSU funds, infrastructure funds, and power/energy sector funds could be looked at selectively, given the sector-wise strength visible in the data. For those seeking a balanced risk-reward, hybrid equity funds, multi-asset funds can also be considered for smooth returns across market phases,' Shinde further recommends. Shenoy recommends diversification across categories as that will allow them to generate alpha while taking advantage of active management. Also Read | 78% smallcap mutual funds outperform their benchmarks in one year. Have you invested in any for your portfolio? 'Investors should diversify across different categories of mutual funds — including large cap, mid cap, small cap, flexi cap and multi-cap categories. This will allow you to generate alpha while taking advantage of the active management,' he recommended. BSE Sensex on Monday gained 855.30 points or 1.09% to close at 79,408.50, while the broader Nifty 50 index closed at 24,125.55, higher by 273.90 points or 1.15%. India's benchmark indices extended their winning streak to five sessions on Monday. In the last six months, the benchmark index has gone down by 3.28%. In the last one and three months, the index gained 2.88% and 1.91% respectively. Shinde attributes this surge to strong performance in banking, financials, and power stocks and he added that data shows that names like IndusInd Bank (+17.35%), Power Grid (+15.52%), Axis Bank (+15.30%), Bharti Airtel, and ICICI Bank have shown sharp up moves over the past month. 'A combination of robust earnings expectations, FII inflows, improving macros (inflation cooling, policy stability), and global tailwinds (such as the softer dollar and Fed pause hopes) have all contributed. The financial sector, particularly private banks and NBFCs, continues to exhibit earnings resilience and strong credit growth, suggesting potential sustainability. The power and telecom sectors are also gaining on structural tailwinds and capex cycles,' Shinde adds. By the time President Trump announced a reciprocal tariff policy, the BSE Sensex had gained 2.53%. Shenoy believes that India's macro fundamentals are strong, and market valuations are quite fair, inflation and fiscal deficit are under control, and earnings growth, which was sluggish in the first half of the year, is expected to pick up — as evident from Q3 and Q4 numbers going forward. He further shared data on how the Indian market and international market have performed since the tariff announcement date, which shows that Nifty 50 has gone up by 4.02%, whereas international indices such as S&P 500, Shanghai Composite , Hang Seng, and Nikkei 225 have lost between 1.98% to 13.61%. 'India is the least affected country by the reciprocal tariff policy of the US, especially when we look at the returns side by side. Only Indian markets have shown positive returns among major global indices. Even under global pressure, Nifty has managed better downside protection,' Shenoy added. Also Read | Looking for mutual fund with highest returns? Radhika Gupta warns of broken metric After seeing the negative performance by the index in the last six months and now the index witnessing a minimal surge of 0.53% in the current calendar year and about to reach all-time level, Shenoy recommends that this is a good time to enter the market and one who has lumpsum amount to invest can stagger the investment over three to four weeks and in case if one is investing through SIPs, they can continue with the same. Shinde also shares a similar opinion. He recommends that, given the market is at record highs, SIP remains the preferred route for fresh allocations — it helps mitigate timing risk and allows rupee-cost averaging. 'For those sitting on idle capital and a high-risk appetite, staggered lump-sum investments (STP or tranches) into equity funds over the next few months could be a smart middle path. Even for those who missed the rally, it's not too late to enter, as India's fundamentals remain intact, and the structural growth opportunity is long-term. But entering with a disciplined approach (via SIP or STP) is crucial to avoid emotional reactions to any short-term corrections,' he further recommends. One should always invest based on their 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.
