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10 mutual fund options that could be good bets as markets trend higher

Investment advisors feel this is time for caution and that investors should veer more towards funds with exposure towards large-caps or those that are multi-cap and avoid riskier small-cap funds.

August 17, 2018 / 11:16 IST
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Sarbajeet K Sen Moneycontrol News

The stock market has risen sharply during recent months giving good returns to many investors. If you are a mutual fund investor with funds that have high equity exposure, you too must have seen your portfolio rising along with the stock market.

However, these are also times when investors who are putting fresh money into funds find themselves in quandary. The questions that they would be asking is what should be the investment strategy at this point and which funds could be good options to invest?

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Investment advisors feel that this is time for caution and that mutual fund investors should veer more towards funds with exposure towards large-caps or that are multi-cap funds and avoid riskier small-cap funds.

“At this juncture, one should look at good schemes from balanced advantage, value, large cap and multicap funds. It is advisable to maintain a properly asset allocated portfolio. Also, one should not get into small-cap funds as it carries high risk. The P/E of small cap index is over 110 which is above normal level of P/E. similarly the investor should be bit more cautious investing in midcap as well as the P/E of midcap index is around 33,” says S Sridharan, Business Head, Financial Planning, Wealth ladder Investments.

Recommending an asset allocation is 70% in equity and 30% in debt, Sridharan’s top 5 fund picks that could give good returns with a holding period of 5 years are follows:

Scheme NameCategory% Allocation1 year3 year5 year
BOI Axa Credit Risk-GDebt-Credit Risk20%7.619.73NA
Franklin India Equity Hybrid-GEquity-Hybrid20%6.117.9417.75
ICICI Pru Bluechip-GEquity-Largecap20%10.1611.2719.31
Invesco India Contra-GEquity-Value20%20.5414.6828.04
UTI Equity-GEquity-Multicap20%20.811.2420.39

Anand Dalmia, Co-founder Fisdom says that the investing plan at this juncture should be linked to the goals of an individual. “The trick of the game is to decide the amount you want to invest, link it to a goal or not (in case you want to just build wealth) and choose the right investment option,” he said.