Navigating the stock market: SIP strategies, asset allocation key for long-term mutual fund gains | Mint

As the Indian stock market undergoes rapid changes across all segments, mutual fund investors must strategically position themselves. Given the current macroeconomic environment, maintaining a spirit of diversification is crucial. Siddharth Maurya, Founder & Managing Director of Vibhavangal Anukulakara Private Limited, emphasises the importance of a balanced allocation among large, mid, and small-cap funds.

Swapnil Aggarwal, Director of VSRK Capital, recommends investing in long-duration funds. He suggests that thematic mutual funds, which often include significant allocations to multi-cap and flexi-cap funds, are worth considering. “Proper asset allocation is essential right now. While the market isn’t expensive, many stocks have corrected by 30% to 40% from their lifetime highs. Large-cap stocks have underperformed, which may deter retail investors,” Aggarwal notes.

Strategic Investment Focus

Experts suggest that investors should focus on large-cap stocks rather than small and mid-cap ones, especially if they currently hold SIPs in those segments. Maintaining these SIPs is advisable, given a long investment horizon of over 20 years, which could yield favourable returns.

For large-cap exposure, it may be beneficial to park funds in liquid assets and initiate a systematic transfer plan (STP) over the next 4 to 6 months. Maurya adds, “Look for fundamentally sound and high-quality businesses. Short to medium-duration debt funds can provide stability and a steady income flow. For those with a higher risk appetite, thematic investments in technology, healthcare, and infrastructure can align with the Indian growth narrative.”

Market Trends and Performance

According to market experts, systematic investment plans (SIPs) currently serve as effective tools for wealth accumulation through long-term, rupee-cost-averaging investments. However, investors should regularly review their portfolio allocations and stay vigilant about market changes, including economic policies, corporate profits, and global trends.

In recent market performance, the benchmark Sensex rose by 335.06 points, or 0.42%, closing at 79,724.12 during a special Muhurat trading session on Friday, marking the start of Samvat year 2081. Conversely, in October, the BSE benchmark index fell by 4,910.72 points, or 5.82%, while the Nifty declined by 1,605.5 points, or 6.22%.

Despite a 10% decrease in equity mutual fund inflows to ₹34,419 crore in September, this was the 43rd consecutive month of net inflow in equity-oriented funds, highlighting their enduring popularity among investors, as reported by the Association of Mutual Funds in India (AMFI) on October 10.

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Disclaimer: The views and recommendations made above are those of individual analysts, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.