Here’s How To Protect Your Mutual Fund Portfolio When The Markets Are Falling?
AUM crosses Rs 36 lakh crores
The AUM of the Indian mutual fund market recently exceeded Rs 36 lakh crores. The average assets under management (AAUM) of the Indian mutual fund industry for the month of August 2021 stood at Rs 36.09.471 crore. Indian Mutual Fund Industry Assets Under Management (AUM) as of August 31, 2021 was Rs 36.59.445 crore.
The mutual fund segment as an investment arena has seen a big rally over the past 1.5 years. It should be noted that there are mutual funds that have given over 100% return in this rally.
Now, as Nifty approaches the 18k level and Sensex has already crossed the 60k mark for the first time in its history, there are fears of losing previous returns. Mutual Fund / SIP investors have a valid concern in mind – whether to stay invested in the market or not. Here are some techniques you can follow in such a volatile market:
Strategies to adopt
1. Rebalance the portfolio with dynamic asset allocation funds (balanced advantage):
Dynamic Asset helps reduce downside risk by diversifying your investments. It tracks the performance of all asset classes and reduces the allocation of overvalued assets, and allocates at the time of reasonable pricing.
2. Invest in SIP mode:
The SIP method helps you buy more units when the market is going down, which helps to average the price.
3. Invest via STP instead of a lump sum:
If you want to invest in the market on a lump sum basis, it is always best to invest through the systematic transfer plan (STP) model. With STP, your funds are parked in the debt market and invest in the equity market in a few installments, which helps to combat volatility.
4. Stay invested in goal-oriented investing:
If you have invested your money for the long term, which is linked to any objective and its investment duration is greater than 10 years, you can stay invested there, because whatever the level of the market, the market equity has never given negative returns in 10 years. years.
The MF industry AUM had crossed the Rs 10 Lakh Crore milestone for the first time in May 2014 and in a short period of about three years the AUM had grown more than twice in size and crossed Rs 20 Lakh Crore for the first time in August 2017. AUM size crossed Rs 30 Lakh Crore for the first time in November 2020.
Mutual fund industry crosses 10 crore folios
The mutual fund industry had passed the 10 crore folios milestone during the month of May 2021.
The total number of accounts (or folios in mutual fund parlance) as of August 31, 2021 was 10.86 crore (108.6 million), while the number of folios under fund-oriented programs was 10.86 crore (108.6 million). stocks, hybrids and solutions, in which the maximum investment came from the retail segment amounted to approximately 8.95 crore (89.5 million).
Written by – Mr. Ravi Singhal, Vice President, GCL Securities Limited