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personal finance | IST

MF Corner: 4-5% exposure to Chinese equities is ideal for balanced investor

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Are you a mutual fund investor and worried about whether or not your fund has exposure to China? In this episode of ‘Mutual Fund Corner’, CNBC-TV18 spoke to Vishal Dhawan, founder & CEO of Plan Ahead Wealth Advisors, to talk about what should be the plan of action.

Are you a mutual fund investor and worried about whether or not your fund has exposure to China?
In this episode of ‘Mutual Fund Corner’, CNBC-TV18 spoke to Vishal Dhawan, founder & CEO of Plan Ahead Wealth Advisors, to talk about what should be the plan of action.
He said, “I think it is absolutely critical for investors to have China in their portfolio for at least a couple of reasons. One is that China is a very large economy, and gives you access to certain kinds of businesses that may not be listed in India at all, currently, or are just getting listed. Therefore it is critical to participate in there.”
“The second is, from a correlation perspective, the Chinese markets tend to have a relatively low correlation with Indian indices and therefore, even from a diversification perspective, from a longer term point of view, it is a good idea to have some China exposure.”
“How much should you have could depend because if you look at Chinese exposure in the broader indices, say, for example, the MSCI all country world index, you will find it is about 4 or 5 percent there. As far as GDP is concerned, it is about 15-17 percent so typically, five to 10 percent in most client portfolios, would be a good starting point.”
SEBI has recently introduced or rather announced that they will be introducing a new integrated platform which will service every kind of mutual fund need. Anand Dalmia, of Fisdom will talk about the new integrated platform for mutual funds.
Watch accompanying video for more.