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Why is the Indian mutual fund industry running towards multi asset allocation schemes?🤔 In today's volatile market environment, characterized by heightened geopolitical tensions and economic uncertainties, multi-asset mutual funds emerge as a prudent choice for investors. The Indian mutual fund industry's pivot towards multi-asset allocation mutual fund schemes is driven by several factors. Diversification is a key advantage offered by multi-asset allocation funds. By spreading investments across different asset classes such as equities, fixed income, and commodities, these funds mitigate risk and potentially enhance returns. This diversification becomes particularly crucial amidst the volatility in equity markets, where assets like gold and silver often serve as hedges against market fluctuations. Moreover, global economic conditions paint a picture of ongoing challenges, with major economies facing the specter of recession. Tighter monetary policies aimed at addressing inflation, geopolitical tensions, and disruptions in the supply chain further contribute to market uncertainty. In such an environment, multi-asset allocation funds provide a balanced approach to navigate through turbulent times. Recent changes in taxation policies also make multi-asset funds attractive for investors. Capital gains from mutual fund investments, with domestic equity allocations below 35%, are now taxed according to the investor's slab rate. This makes multi-asset funds, which maintain diversified portfolios across equity, debt, and other assets, appealing for risk-averse investors seeking tax-efficient investment options. The industry's response to these dynamics is evident, with eight Asset Management Companies (AMCs) launching multi-asset allocation funds in the first two months of 2024 alone, intensifying competition in the market. Who should consider investing in multi-asset funds? While these funds cater to investors across the risk spectrum, they are particularly suitable for those with a low risk appetite. By blending various asset classes, multi-asset funds help mitigate risks associated with over-reliance on any single asset type. However, before making investment decisions, it's essential to assess various factors including past performance, comparisons with peers in terms of returns, and considerations of other mutual fund types specializing in equities, debt, or specific sectors. Such diligence aids in selecting the most suitable fund to secure one's financial future. #multiassetfund #NFOs #mutualfunds #assetallocation #HSBCMF #DSPMF #PPFASMF #quantumMF #quantMF #icicimf #sbimf #equityfunds #debtfunds #hybridfunds

In January 2024, The Alternatives Investor Private Credit Index returned 0.93%, compared to 1.73% in December 2023 and 2.95% in January 2023. For comparison, the ICE Bank of America High Yield Index returned 7.64% in January 2024. It's worth noting that publicly traded credit is more volatile than private credit, and a significant driver of the return in the BofA HY index was price appreciation as credit spreads tightened. Private credit managers typically lag public credit markets in revaluing the portfolio up or down. The Alternatives Investor Private Credit Index is constructed using returns from the private credit funds available to individual investors. Some key private credit funds included in the Index are: - ADS managed by Apollo Global Management, Inc. - ASIF managed by Ares Management Corporation - BCRED managed by Blackstone - BDEBT managed by BlackRock - CTAC managed by The Carlyle Group - KCOP managed by KKR - OCIC managed by Blue Owl Capital - OSCF managed by Oaktree Capital Management, L.P. https://lnkd.in/duhcfdn8 #privatecredit #alternativesinvestor #privatecreditindex #privatefunds #privatemarkets #privatemarket #alternativeinvestments #alternativeinvestment #returns #roi

🌐 **Overheated Markets: What the Stress Tests Reveal About Mid and Small-Cap Mutual Funds** 📊 Amid soaring stock markets, mid and small-cap mutual funds have been attracting investors with the promise of high returns. However, recent stress tests mandated by SEBI tell a more cautious story. 🚨 The latest results show that it could take between 19 to 53 days to liquidate 50% of small-cap portfolios in a stress scenario, while mid-cap funds range from 8 to 30 days. Although the numbers have slightly improved since February, the liquidity risks remain real. 🛑 With many funds holding only 2.5% to 8% in cash, redemption pressures during volatile times could lead to significant delays. For investors, this is a critical reminder: while high returns are attractive, risk management is key. 📉 Diversifying and staying informed is crucial in navigating these overheated markets. 💡 **Key Takeaways:** - Mid and small-cap funds show slow liquidation times in stress scenarios. - Liquidity risks are prevalent, with low cash reserves in most funds. - Investors should balance risk and return, particularly in volatile markets. #Investing #MutualFunds #MidCap #SmallCap #SEBI #RiskManagement #Liquidity #MarketTrends

Understanding #AssetClassDiversification from a #VolatilityManagement Perspective In today’s ever-evolving financial landscape, managing investment volatility has become a crucial aspect of portfolio strategy. One of the most effective ways to achieve this is through asset class diversification. Let's delve into why this approach is vital &how it can help mitigate risk and enhance returns. What is Asset Class Diversification: Asset class diversification involves spreading investments across various asset categories, such as equities, bonds, real estate,& commodities. The fundamental idea is that different asset classes respond differently to market conditions, thus balancing the overall risk. The Role of Volatility in Investments: Volatility refers to the degree of variation in the price of an asset over time. High volatility means greater uncertainty and risk, which can lead to significant losses. For investors, managing this volatility is essential to ensure long-term growth and stability. Benefits of Diversification for Volatility Management: #RiskReduction:By allocating investments across diverse asset classes, the impact of a poor-performing asset on the overall portfolio is minimized. When equitymarkets are down, bonds or realestate might still perform well, cushioning the blow. #EnhancedReturns:Diversified portfolios can capture gains from various markets & sectors, potentially leading to more stable and consistentreturns over time. #SmootherRide:Diversification helps in achieving a more predictable performance, which is particularly important for risk-averse investors seeking steadygrowth rather than high, but erratic, returns. Practical Steps to #AchieveDiversification: #IdentifyCorrelations: Choose assets that do not move in tandem. Stocks & bonds often have an inverserelationship. #GlobalDiversification: Consider investing in international markets to hedge against domestic economicdownturns. #RegularRebalancing: Periodically adjust your portfolio to maintain the desired level of diversification as marketconditions change. #IncorporateAlternativeInvestments: Include non-traditional assets like real estate, commodities,or hedge funds to further spread risk. Challenges & Considerations: #CostImplications:Diversification can sometimes lead to higher transaction costs and management fees. #OverDiversification:Spreading too thin can dilute potential gains,making it essential to strike the right balance. #MarketDynamics:Economic conditions and market behavior can change, necessitating continuous monitoring &adjustment of the diversified portfolio. Conclusion: Assetclass diversification is a cornerstone of effective volatility management in investmentstrategy. By spreading investments across various asset classes, investors can mitigaterisks, achieve more stablereturns,& navigate the uncertainties of the financialmarkets with greater confidence. Follow ROSHAAN MAHBUBANI for insights on #InvestmentStrategy & #marketanalysis

On 13 May 2024, we will list the Lion-OCBC Securities APAC Financials Dividend Plus ETF. It is a collaboration between our brokerage, OCBC Securities, and our asset management arm, Lion Global Investors. It will appeal to investors seeking stable and consistent dividends, and those who want to tap on Asia’s growth story, plus those looking for potential capital gains.   This ETF is by no means the first for OCBC Group. It is already our 4th ETF in less than 4 years. Our previous 3 ETFs have been popular, with the Lion-OCBC Securities Hang Seng TECH ETF having the highest returns among SGX-listed China equities ETFs in 2023. The Lion-OCBC Securities Singapore Low Carbon ETF also beat competitors to be the top performing Singapore equities ETF last year.   With this strong proposition, we expect the Lion-OCBC Securities APAC Financials Dividend Plus ETF to be well-received too.   As always, a big congratulations and thank you to the team behind this launch.   Wilson He, Teo Joo Wah, ONG Xun Xiang (王勋祥), CFA, CAIA, CA, keng han Kwok, Jaime Kuek, Pauline Koh, Jacqueline Yeh, Shih Teng Kao, Grace Tan, Joe Lew, Darren T., Ziv C., Ho Chan Keen, CFA, Karen Lim, Joyce You, Zachary Cheong, Nicole Low, Aiqing L., Bernadette Yuen, Angelene Yong #ETF #Investing #Trading

GS | The lowdown on the risk of an(other) equity drawdown - Global equities had a drawdown in August and have remained volatile since. Equity drawdowns are a common feature, but their size and frequency has varied over time - risk-adjusted returns were unusually high in the last 12 months. - While 'buy the dip' has been a successful strategy since the GFC, its success has been mixed over long horizons as often equity drawdown risk lingers. If an equity drawdown comes alongside a fast and broad de-risking across assets the asymmetry to 'buy the dip' is usually positive Full note: https://lnkd.in/dCpaNR75 #equities #btfd

𝗜𝗻𝘃𝗲𝘀𝘁𝗼𝗿𝘀 𝗟𝘂𝗿𝗰𝗵 𝗳𝗿𝗼𝗺 𝗘𝗾𝘂𝗶𝘁𝗶𝗲𝘀 𝘁𝗼 𝗕𝗼𝗻𝗱𝘀 Despite strong equity performance, we note a tapering off of flows to the asset class in March, as bonds have proven the main (if not only) game in town for the quarter, netting £4.23bn. Commodities are the only other asset class in positive territory, to the tune of £28m—hardly an earth-shaking figure—while everything else is in redemption mode over the first three months of the year. Mixed assets funds have suffered most, shedding £2.74bn. Overall, £1.5bn has been pulled from ETFs and mutual funds over the quarter, although this falls to £266m once money market funds (MFF) are excluded. https://lnkd.in/ePdD3C_f

In a fictional survey of 1000 allocators in late 2023, precisely zero predicted that #ctas would outperform the S&P 500 in 2024 during a great start to the year for equities. And only 7 predicted that bonds would be down over the same period. #hedgefunds #etfs