In February 2021 (for which the latest data is available at the time of writing this story) these funds saw inflows worth ~2,005.8 crore. Let us understand how these funds work and their pros and cons before we decide to invest in them.
The current environment
At present, an economic recovery is underway. At the same time, prices of a wide range of commodities, including crude oil, have shot up. This is leading to higher inflation. Bonds yields are moving up. There is fear that if inflation is very strong, it may force central banks to abandon their pro-growth, accommodative monetary stance. Central banks may then have to hike interest rates to rein in inflation. This would be negative for the equity markets.
Valuations within the Indian equity market are also not inexpensive. That, too, is causing anxiety among investors.
At the same time, a lot of investors are positive about the economic recovery and the expected recovery in corporate earnings. They expect earnings growth to drive the equity markets forward in the future.
Thus, a tug of war is on within the equity markets between the bulls and the bears. There is no certainty about whether the markets will move further up or correct. This is responsible for the volatility we are witnessing periodically.
In such an environment, many investors may like to invest in a type of fund that follows a model-driven approach towards allocating to equities and debt.
How do BAF/DAA funds work?
Denne historien er fra April 2021-utgaven av Investors India.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent ? Logg på
Denne historien er fra April 2021-utgaven av Investors India.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent? Logg på
ASK THE EXPERT
Ques. One of my friends told me that your company provides detailed Retirement plans. I want to know what is the procedure to get my Retirement plan. I will be retiring in March 2025. R.P Gupta, Noida
How to Naturally Reverse Fatty Liver Disease
The liver, located on the upper-right side of the abdomen, is the body’s largest internal organ and plays a critical role in detoxifying the blood and processing nutrients.
Banking sector which has underperformed in the last two years, now offers a favorable risk-reward profile
Do you think the market is overpriced? Is yes, should investors refrain from investing in index schemes at the current valuation?
India will continue to enjoy benefits of a close US relationship and trade will continue to grow
Q1. The US elections are said to be one of the closest till date, what impact will the election of a Republican / Democratic party have on the US economy and how is that going to affect India in the short as well as the long term?
Understanding Momentum Funds
Momentum funds are a type of investment fund that focuses on companies experiencing positive momentum in factors such as earnings, revenue, and stock price movement.
Risks and opportunities associated with Small Caps
Small-caps are a stock-picker’s paradise.
How to navigate your portfolio through bull market a
Indian equities have been in a bull run for the past four years.
Choosing mutual fund schemes depending on your age to achieve life goals
The choice of mutual fund (MF) scheme might be influenced by one’s risk profile or age.
Thematic Fund Or Sectoral Fund, Which Fund Suits You?
A thematic fund is a type of mutual fund that focuses on investing in companies based on specific themes or trends.
Be Kind To Your Kidneys
The kidney is a vital organ in our body which is four inches long and two and a half inches in width.
