This Diwali, Add Sparkle to Your Portfolio with Mutual Funds!

As India gradually resumes activity after lockdown, the Indian economy has witnessed some greenshoots in the last few months. Growth in the agricultural sector due to good monsoon, government stimulus, and the Atma Nirbhar initiative are expected to gradually push domestic demand, driving the economy on the path of revival. With Diwali round the corner and a not-so -gloomy outlook, it is time for investors to take stock of their investment portfolio and add some shine with mutual funds.

How investors can add sparkle to their portfolios with mutual funds:

Check if you are diversified

Risk mitigation is the number one lesson that investors need to learn. Diversification is the key to risk mitigation. Ensure that you spread your investments across various asset classes.
With mutual funds, you can diversify your investment across different companies within the same asset class as well as across asset classes such as equity and debt. Again, your exposure to various assets/funds should depend on your age, financial goals, and risk aptitude.

Rebalance your portfolio:

Just like we take clean our houses and get rid of old, worn-out things for Diwali, it is essential that you revisit your investment portfolio and realign it with your financial goals. Financial goals and risk appetite change over time and with circumstances. Check if you need to rebalance your portfolio. If yes, select a mutual fund scheme that aligns with your goals and risk profile.
If you currently have a low-risk aptitude, you may opt for fixed income mutual funds. Track your mutual fund scheme performance and compare it with peers. You may even want to switch to other funds with better ratings on this basis.

Check the holding tenure as per your goals and risk profile

Your holding tenure should match with your financial goals. If you are investing to meet your short-term financial goals, say less than a year away, you may do well by investing in liquid funds, which are less susceptible to market volatility.
For long-term goals, you may choose to invest in equity mutual funds through SIP. SIPs offer a staggered approach to investment. This has several advantages such as rupee cost averaging and not having to time the market.
Further, you may want to exit a fund that is no longer serving your goals or risk preference.

Ensure liquidity for emergencies

Do you have adequate cash to meet any emergencies? If not, you may keep some of your investment in liquid funds as you can immediately cash in your investments when the need arises.
Ring in this Diwali by investing in mutual funds. Do consider the reputation of the fund house, expense ratios, and track record of the scheme before investing.
Wish you a financially bright Diwali!
This Diwali, add sparkle to your portfolio with
mutual funds!
Disclaimer: This article represents the views of Axis Asset Management Co. Ltd. and must not be taken as the basis for an investment decision. Neither Axis Mutual Fund, Axis Mutual Fund Trustee Limited nor Axis Asset Management Company Limited, its Directors or associates shall be liable for any damages including lost revenue or lost profits that may arise from the use of the information contained herein. Investors are requested to consult their financial, tax and other advisors before taking any investment decision(s). Statutory Details: Axis Mutual Fund has been established as a Trust under the Indian Trusts Act, 1882, sponsored by Axis Bank Ltd. (liability restricted to Rs. 1 Lakh). Trustee: Axis Mutual Fund Trustee Ltd. Investment Manager: Axis Asset Management Co. Ltd. (the AMC). Risk Factors: Axis Bank Limited is not liable or responsible for any loss or shortfall resulting from the operation of the scheme. No representation or warranty is made as to the accuracy, completeness or fairness of the information and opinions contained herein. The AMC reserves the right to make modifications and alterations to this statement as may be required from time to time. Past performance may or may not be sustained in the future.
Mutual Fund Investments are subject to market risks, read all scheme related documents carefully.