Year Ender 2023: Some giveth, some taketh for mutual fund investors | Simply Save

If you have been investing in mutual funds, then 2023 was an action-packed year. But things did not look as rosy when the year began as the Union Budget took away taxation benefits on debt mutual funds, impacting their appeal.

To listen to the podcast, click above. To read the podcast conversation, scroll down.

As a result, hybrid funds came in the limelight, with this category receiving net inflows of over Rs 85,000 crore since April.

Despite the taxation setback, the Indian mutual funds industry has most likely crossed the historic Rs 50 lakh-crore milestone in terms of assets under management. By the end of November, it had been managing Rs 49 lakh crore; December-end figures would be made public only in the first week of 2024.

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New fund houses set shop. Bajaj Finserv, Helios and Zerodha Mutual Funds launched their first schemes. Kenneth Andrade’s Old Bridge Capital Management received final approval from the Securities and Exchange Board of India (SEBI) to start a mutual fund business.

Moneycontrol spoke to Lovaii Navlakhi, Managing Director and CEO at International Money Matters Pvt Ltd, about the key investment trends of 2023, top mistakes that investors made during the year and what investors should look out for in 2024.
Here are key points from the conversation with Navlakhi:

· The winners of 2023 are the real estate and auto sectors.

· Technology and pharmaceutical sectors fared poorly.

· Small-cap stocks are continuing to rise, even though valuations now look stretched. Therefore, one just needs to be a bit more careful in this pack.

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· To get the best out of small-cap investing, stay invested for seven years. In that cycle, you will get boom periods like the last year with the 50 percent kind of returns.

· Put more in large-cap stocks now.

· Keep a close eye on your asset allocation.

· If you find that equities have gone overboard, then taking off some money and bringing your allocation back into the band that you're comfortable with is a good idea.

· Big mistake No.1: Investors focus on short-term investing.

· Big mistake No.2: Investors are still pouring money into small-cap stocks. Worse: they are shifting money from fixed-income investments or large-cap stocks.

· Big mistake No.3: Investors didn’t invest as much in gold at the start of the year because gold gave poor returns in 2022. Bad decision, given how gold prices went up in 2023.

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· If valuations become very expensive, we may not see growth.

· Sometimes corrections happen not in price, but in time. So you might see one or two quarters of a flat type of market where you're making zero return.