A good and peaceful investment experience is the key to be a successful investor. Though there are specific risks attached to the different investment instruments, strategy-based investment while sticking to investment basics can yield the desired results.
Given the current state of world economics amid rising geopolitical tensions, uncomfortably high market valuations and a concerning high tilt towards equity - mainly the midcap and smallcap categories pushing risk-reward to the back seat; the fluctuations and volatilities are expected to be much higher in short to mid-term.
Thus it calls for a strategy and investment style that remains growth-oriented yet ensure minimum variance with less fluctuations while investors have a peace of mind. In fact, the current situation warrants streamlining and strategizing your investments. For instance, over the past few years midcap and smallcap space have rallied the most and investors have developed an affinity for the same. The latest corrections in the market are being used by investors to average out their investments by purchasing more. However, it is here the trap lies as averaging cost of investments, at times may be deceptive and possibly could not yield the expected returns going forward.
It is, therefore, essential that investors should look for space where valuations are reasonable and variance is minimum. And it is needless to say that the large cap space, mainly the stocks comprising Nifty 50 Index fit this criteria. Low volatility, high governance and ample liquidity and reasonable current valuations make investment in Nifty 50 companies an attractive proposition. A better risk adjusted returns with low variance make equity mutual fund schemes as a suitable investment avenue.
In this context, investors may consider ICICI Prudential Mutual Fund’s new offering, the ICICI Prudential Equity Minimum Variance Fund, available from November 18 to December 2, 2024. This scheme is ideal for those seeking long-term capital growth and equity exposure while minimizing market volatility, with a focus on large-cap companies known for strong corporate governance and robust cash flows. The strategy focuses on low-volatility large-cap stocks, using analysis and weight management to create a diversified, stable portfolio.