If one takes a glance at the overall outlook at the functioning of the mutual fund industry one can easily conclude that this industry is so dynamic that everyday there is some action and activities of sorts to take a serious look into it and that too a handful right from the digital route to mutual fund investing which is usually a route without the distributor or the advisor. The prime issue or rather the challenge is that the people should get the awareness and shift to the mutual funds from the usual practice of bank deposits and the post office savings towards the mutual funds, needless to say that the pain of losing Rs 10/- is more than the joy of earning Rs 100/- in the market or otherwise. It is becoming even more challenging with the increasing number of the portfolios and investments doing the rounds in the mutual funds especially in the past recent years. Now the investors have the options to either invest directly or through the intermediaries who have also paved way as an option to the investors to choose which route they wish to take.
During the past few years which have witnessed a sea change within the mutual fund industry especially the way they go around communicating and targeting their clients. As the focus is more on the benefit of the clients rather than the achievement of the products. Here the investor’s education plays a very important role and this is infact the primary barrier and this education only helps in increasing the client base whereas the direct, regular, online and the offline route are headed to coexist. The investor must be made aware that the investments in mutual fund are infact a wealth amassing tool, which only needs the expert advisor’s help to suggest the right fund and execute it. The crux in mutual fund is how to select a fund that is how to match one’s profile with the funds which would eventually help you achieve your financial goals.
Now even the regulatory body is doing the efforts towards the streamlining the fund offerings by erasing the redundancies in the fund’s objectives as well as certain overlaps, and this cleansing will only that there will be only limited funds which are on the offer with a clear investment objective which is crystal clear and understood by an investor to invest in.
Moreover even the mood of the market is changing as a lot is riding on the better monsoons which we have had recently, the great development in the infrastructure sector and last but not the least the impact of the pay commission plus the consumer discretionary companies have obviously benefitted from the normal monsoons the thrust given by the government towards make in India and various other initiatives like the GST bill being passed. Moreover the fundamentals of the Indian economy remain very strong with the fiscal deficit. Current account deficit and last but not the least the inflation is in much better shape, plus the lower crude prices, monetary easing and the pick-up in the earnings and the growth as well. This is the ripe moment which also gives the ample opportunity to the fund managers to shift the baskets and make the most of these changes. Not to forget that the growth potential which our economy has shown are too promising and we are very positive on the equity side. On the other hand a lot of cleansing is required on the debt side as this segment has taken a bad hit on its reputation just because of the nonperforming assets NPA’s and the various rollovers but all said and done the debt side cannot be simply ignored. The accrual products would be good and that too if one goes with the credit exposure and does the credit research well enough than it is definitely going to be the best product. Even if you go for the midcap index for the past 1 year and you will see that it has given returns around 10 to 15 percent, and if you consider 2 years than the returns are 20 percent and for the past 3 years that’s 35 percent and this is fair enough to conclude that the broader market has infact given fairly higher returns.
The best way to benefit from investing in the mutual fund investing is to have atleast a mindset of 5 year investment time frame. Moreover even the use of the technology will make investing in the mutual funds really convenient and one should also bear in mind that the ease of doing the business is very important but even more important is the that one invests with proper expert’s guidance. It is fairly a challenging to experience the mutual funds in such a manner that it achieves your financial goals. The obvious choice would be the systematic investment plan –SIPs, the best way to invest in equity mutual funds and literally do away with the anxiety of the ubiquitous market volatility, and on the other hand one need not just worry about timing the market and the usual risk factors associated while investing as these instruments are very well managed.
The crux is very simple that is to invest money and get more than satisfactory results by choosing the right product at the right time and spreading the investments in the blue chips across the sectors and the returns are definitely much more than the fixed deposits. Buying on the past performance is ok but neglecting those funds which are going through the temporary phases of rough patches is always a blunder of sorts. Buying when the market is low and sell when the market is high. More over there is tremendous scope to gain by investing in the Indian markets that too through the mutual funds which are going to be definitely benefitted over the period of next 4-5 years.