CEO Speak

From the highs of January 2021 in the Indian stock markets, February saw some volatility. Our recommendations to investors continue to be based on some fundamental principles of equity investing.

“Stay invested basis your long-term financial goals and keep investing regularly as ‘time spent’ in the market matters more than ‘timing’ in the market.”

What is critical to note is that we are now seeing increased economic activities in the country and worldwide and getting some heartening indicators which are enablers to investment decision making.E-way bills for February continue to record double digit growth at 15.6% (YoY).Improvement in economic activity is reflected in GST collections as February witnessed another month with GST revenue remained above the INR 1 trillion mark. This was 5th consecutive month with collections of more than Rs 1 trillion. The sustained GST collection and several other data points show that the economy is moving close to normal across many segments. Budget 2021 has also enabled the growth story with significant outlays in capital expenditure and health care. The vaccination programme rolls out also marks a huge step towards normalisation.

While there are investors who have the risk appetite to invest into equity markets or equity funds, many investors are also taking keen interest in Dynamic asset allocation funds which is a mix of equity and debt actively managed based on valuation levels.

What are Dynamic Asset Allocation funds (Balanced Advantage Funds)?

These funds essentially work on the investing strategy that allows it to adjust the mix of equity and debt component depending on the view of stock market and prevailing economic conditions to help mitigate risk. The portfolio model is derived from various fundamental and technical indicators which allows the fund managers to increase or decrease allocation to equity. Historical data suggests that such a strategy helps in taming the volatility and yet help investors participate in the long-term growth potential of equities. So, for the cautious investors, such funds tend to give favourable risk adjusted returns for medium to long term investment horizon.

At L&T Mutual Fund, we are committed to customer centricity. Aadhaar OTP based eKYC is one more step towards digital ease of transactions for customers, which is the need or the hour. For investors who are still uninitiated on mutual funds, getting started with Aadhaar OTP based eKYC is a matter of few clicks on our website and you can initiate with a simple SIP (Systematic Investment Plan) which remains to be an evergreen mode of regular savings.

With Women’s Day round the corner, our shout out to all the women out there who are hesitant in doing active participation in financial investing, is to get started. Investing in Mutual Funds is easy and SIPs is a proven way towards regular savings and potential wealth generation. Today you have at your access all the information on the web which can educate you on fundamentals on investing, asset allocation and mutual funds. The pandemic has only taught us how important it is to save for contingencies and managing finances is gender neutral. We strongly believe that one must:

  • Arm oneself with knowledge.
  • Take interest and participate in family finances.
  • Invest with a financial goal.
  • Assess your risk appetite.
  • Allocate your funds into different instruments basis your financial goal and risk appetite.

Stay safe and Happy investing!

Source: Bloomberg, MSCI

Disclaimer – The article (including market views expressed herein) is for general information only and does not have regard to specific investment objectives, financial situation and the particular needs of any specific person who may receive this information. The article provides general information and comparisons made (if any) are only for illustration purposes. Investments in mutual funds and secondary markets inherently involve risks and recipient should consult their legal, tax and financial advisors before investing. Recipient of this document should understand that statements made herein regarding future prospects may not be realized. Recipient should also understand that any reference to the indices/ sectors/ securities/ schemes etc. in the article is only for illustration purpose and are NOT stock recommendation(s) from the author or L&T Investment Management Limited, the asset management company of L&T Mutual Fund (“the Fund”) or any of its associates. Any performance information shown refers to the past and should not be seen as an indication of future returns. The value of investments and any income from them can go down as well as up. The distribution of the article in certain jurisdictions may be restricted or totally prohibited and accordingly, persons who come into possession of the article are required to inform themselves about, and to observe, any such restrictions.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.