Nifty50 fell 2.8 percent, while BSE Sensex declined 3.8 percent in May 2020. As per a report by IIFL Securities, Indian equities are likely to see spells of volatility with a downward bias as various economic and industry data are expected to be severely weak despite partial relaxation of the lockdown. Investors with low risk appetite for direct equities can continue to invest in equities through mutual funds in a staggered manner and such investors are often advised to top up their SIP amount to bring down their average cost, suggests the brokerage. IIFL has listed its top equity, and debt mutual fund picks for June and also suggested three different MF portfolio strategies for investors.
Equity Mutual Funds: In this category, IIFL recommends Mirae Asset Large Cap Fund, IIFL-focused equity fund, Kotak Standard Multicap Fund, Axis Midcap Fund, and Nippon India Small Cap Fund. These funds have given a 5-year return between 4.9-5.7 percent, however, returns for the last 1 year have been negative for each fund.
Debt Mutual Funds: IIFL recommends HDFC Overnight Find, Nippon India Liquid Fund, ICICI Pru Corporate Bond Fund, IDFC Bond Fund- Medium Term, and Axis Banking & PSU Debt Fund. All these funds have delivered positive returns in the last 1 year, between 4.6-11 percent.
Aggressive Model Portfolio: The objective of the strategy is to generate substantial wealth in the long run for investors from a portfolio of aggressive equity-oriented mutual funds. The strategy takes a concentrated position in mutual funds across different market-cap and sectors and endeavors to strategically change allocation between different market-cap and sectors depending on change in the business cycles.
Moderate Model Portfolio: The objective of the strategy is to generate long term capital appreciation for investors from a portfolio of equity-oriented mutual funds with moderate risk appetite, primarily to beat inflation without having too much volatility, IIFL noted.
Conservative Model Portfolio: The objective of the strategy is to generate long term capital appreciation for investors from a portfolio of equity and debt-oriented mutual funds primarily to avoid any potential loss and preserve capital.