The Hindu Business Line : Investors told to diversify

Mumbai, July 25 Asset diversification is the latest advice from fund houses and distributors in the wake of soaring equity markets. Increasing number of fund houses are advising investors to invest in a balance of equity and income funds (debt funds of one year duration).

Income funds, which were not the preferred schemes until some time back on account of fear of interest rate hikes, are now back in contention. For quite some time, fixed maturity plans and liquid funds of very short duration kept flooding the markets. Fund houses have also advised investors to enter into structured and balanced products.

“People have contrarian views on the markets. For the long-term, equity funds are the most appropriate choice, for short term investments up to one year people may look at income funds as interest rates are likely to fall. However, we continue to tell investors to remain invested in equity,” said Mr Sanjay Prakash, Chief Executive Officer, HSBC Asset Management Pvt Ltd. “New investors invest in equity and the old ones are gradually diversifying into other assets,” he added.

Fund managers

Short-term volatility of stock markets should not be a concern for investors, said fund managers. However, since the market has seen a huge rally, the next direction for markets is a cause of concern. Fund managers said this scenario had led to the necessity of asset diversification even for small investors.

“We have advised investors not to put additional money in equity currently and consider income funds and liquid plus funds,” said Mr Vikaas M. Sachdeva, Country Head – Business Development, ING Mutual Fund. For the retail investors, balanced funds would be a great option, he added.

Fund managers are also pushing the capital protection oriented products in the current scenario as they provide a mix of equity and debt. “These funds are receiving good response from sophisticated investors,” said Mr Prakash.

DSP Merrill Lynch

Recently, DSP Merill Lynch Mutual Fund announced the launch of the DSP Merrill Lynch World Gold Fund which would invest in equity shares of gold mining companies through a feeder fund. The fund managers felt that in the rising market conditions, it was essential for investors to diversify from the traditional equity and debt products. “Distributors have been promoting varied asset classes too,” said Mr Anup Maheshwari, Head-Equities and Corporate Strategy, DSP Merrill Lynch Mutual Fund.

Mr Jaideep Bhattacharya, Chief Marketing Officer, UTI Mutual Fund, said the fund house continued to be bullish on the equity markets as investors have to look at what lies ahead and not the current situation.

More Stories on : Investor Protection | Mutual Funds

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
UB Holdings’ open offer for Air Deccan yet to get nod

Reliance Cap posts 220% jump in net

Bear domination

High NSE turnover ‘worrying’

SAIL outsmarts Sensex

A stock index on Harry Potter!

Ramco Sys: Betting on numbers

Puravankara sets Rs 500-525 price band

Omnitech, Zylog IPOs get good response

Bang Overseas eyes capital market

Investors told to diversify