Diversify into US equity funds, but be cognizant of risks
Investors India|August 2023
After a severe market correction in 2022, US market indices have made a robust comeback. Exchange Traded Funds (ETFs) based on the NASDAQ 100 are up more than 40 per cent year-to-date.
Sudipta Mitu
Diversify into US equity funds, but be cognizant of risks

An ETF that tracks the NYSE FANG+ index has registered an increase of 80 per cent. And an index fund based on the broader benchmark, the S&P 500, is up 17.1 per cent.

Trend reversal

In 2022, the performance of US-centric funds suffered significantly due to concerns about high US inflation. There was a belief in the market that the US Federal Reserve would resort to any measure, including aggressive interest rate hikes, to rein in inflation. Exacerbating these concerns was the prospect that the Fed's unyielding stance might tip the US economy into a recession.

Valuations of growth assets such as equities tend to get compressed when interest rates rise.

However, beginning from late 2022 and early 2023, inflation-related fears began to recede somewhat. The financial markets realized that the US Fed's approach would not need to be as hawkish as was previously feared.

Following 10 rate increases totaling 500 basis points, the Fed opted for a pause in June.

Consequently, the Fed funds rate remained between 5 and 5.25 per cent. In contrast to the ambiguity that prevailed in 2022, the market now has greater clarity regarding the scope of rate hikes.

Diese Geschichte stammt aus der August 2023-Ausgabe von Investors India.

Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.

Diese Geschichte stammt aus der August 2023-Ausgabe von Investors India.

Starten Sie Ihre 7-tägige kostenlose Testversion von Magzter GOLD, um auf Tausende kuratierte Premium-Storys sowie über 8.000 Zeitschriften und Zeitungen zuzugreifen.

WEITERE ARTIKEL AUS INVESTORS INDIAAlle anzeigen
Groww Nifty Non-Cyclical Consumer Index Fund: A Consideration Amid Market Fluctuations
Investors India

Groww Nifty Non-Cyclical Consumer Index Fund: A Consideration Amid Market Fluctuations

Financial markets are inherently volatile, shifting through periods of expansion and contraction.

time-read
2 Minuten  |
March 2025
The Budget empowers the consumer-and the patient investor
Investors India

The Budget empowers the consumer-and the patient investor

The best course is to stay invested to reap the benefits of a consumption boost

time-read
3 Minuten  |
March 2025
Importance of Asset Allocation
Investors India

Importance of Asset Allocation

Too often financial planning is made out to be simpler than it is. Of course, at a level financial planning is relatively uncomplicated.

time-read
6 Minuten  |
March 2025
Microbes. Mood, and the Gut-Brain Axis A new frontier in health
Investors India

Microbes. Mood, and the Gut-Brain Axis A new frontier in health

A breakthrough in Gut study was done in America by an Army surgeon William Beaumont.

time-read
6 Minuten  |
March 2025
Why Large Caps Now? Understanding Market Shifts and Investment Opportunities
Investors India

Why Large Caps Now? Understanding Market Shifts and Investment Opportunities

Over the past few years, mid-cap and small-cap stocks have outperformed large caps, but market trends suggest a potential shift in favor of large-cap investments.

time-read
3 Minuten  |
March 2025
How to cope with the correction in mid-cap and small-cap funds
Investors India

How to cope with the correction in mid-cap and small-cap funds

Year-to-date, large-cap funds are down by 5.4 per cent, mid-cap funds have fallen 12.8 per cent, and small-cap funds have seen a decline of 16.2 per cent.

time-read
3 Minuten  |
March 2025
FINANCIAL PLANNING
Investors India

FINANCIAL PLANNING

ASK THE EXPERT

time-read
3 Minuten  |
February 2025
Groww Multicap Fund: Aiming to Capture India's Growth Potential
Investors India

Groww Multicap Fund: Aiming to Capture India's Growth Potential

India is entering a transformative era of economic growth, backed by a unique combination of demographic strength, infrastructure development, and rising global prominence.

time-read
3 Minuten  |
February 2025
How to meet life's key milestones through mutual funds
Investors India

How to meet life's key milestones through mutual funds

Mutual funds offer a disciplined and flexible way to achieve life milestones like education, marriage, home ownership, and retirement. With diverse investment options available n mutual funds that are tailored to risk and goals, they enable systematic wealth creation. Start early, invest consistently, and let compounding work to secure your financial future and fulfill cherished dreams.

time-read
3 Minuten  |
February 2025
Asset Allocation Made Easy with Mutual Funds
Investors India

Asset Allocation Made Easy with Mutual Funds

We often hear the advice that a balanced diet is good for health. It brings together all essential minerals, vitamins and proteins on a plate which are required to keep one healthy.

time-read
3 Minuten  |
February 2025