CEO Speak

As markets continue to surge in India, steady inflows into mutual funds have taken the industry AUM (Assets Under Management) to an all- time high of Rs 19.26 Lakh Crores at the end of April 2017. A buoyant investor sentiment, increased retail conviction and hence, participation in mutual funds and a noticeable growth in Systematic Investment Plans (“SIPs”) could have all attributed to this growth. Also, continuous investor education by all players in the industry could have contributed to increased awareness of mutual funds amongst common retail investors who earlier would not look beyond traditional products.

SIPs continue to see a robust growth and rightly so, as it continues to be one of the preferred ways for long term regular investments into the equity markets and helps to create wealth for the retail investor. Fixed Income funds have also seen a considerable growth as many traditional investors are now moving from the traditional modes of investments, and investing into fixed income products of mutual funds. Balanced fund category and Equity savings schemes which have moderate risk compared to diversified equity schemes have also shown decent signs of continued inflows.

We at L&T Mutual Fund strongly believe that one should stick to basics while deciding and evaluating their options for investments.

Plan your finances: One should establish a goal or a milestone for which they are looking for investing. For eg., children’s education or retirement planning which are long term in nature. On the other hand, it may be a shorter term goal like saving up for a vacation.

Plan your investment basis the goal: Each of these goals has a time frame and hence the investments could be made according to the time frame of the financial goal. A short term investment could be good enough for a vacation kitty while a longer term SIP into a diversified equity fund could be a preferred option for a child’s education.

Diversification: Like the saying goes, don’t put all your eggs in the same basket. This saying is even more relevant for investments. Diversification into different assets classes not just mitigates your risk of being exposed to only one asset class but could also help you to reap the benefits of different asset classes. Diversification must be a cardinal rule followed by retail investors with respect to their financial goals.

Mutual funds also give professional and active fund management expertise which could help the investor to make the most of the equity markets without him being required to monitor the funds on a daily basis. However, our advice to retail investors is also to have the discipline of reviewing your portfolio around twice a year to ensure if you are in line with your expectations. Reviewing and revisiting your investments ensures that you are making necessary changes (if necessary) in line with your financial goals from time to time.

Happy Investing!

(Source : AMFI)

Disclaimer – This document 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. This document provides general information on performance; financial planning and/or comparisons made are only for illustration purposes. The data/information used/disclosed in this document is only for information purposes and not guaranteeing / indicating any returns. This material 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 document is only for illustration purpose and should not be considered as recommendation(s) from the author or L&T Investment Management Limited, the asset management company of L&T Mutual Fund or any of its associates. Recipient of this information should understand that statements made herein regarding future prospects may not be realized or achieved. Neither this document nor the units of L&T Mutual Fund have been registered in any jurisdiction except India. The distribution of this document in certain jurisdictions may be restricted or totally prohibited and accordingly, persons who come into possession of this document 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.