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.
