Now Reading: Four ways to manage mutual fund risk
-
01
Four ways to manage mutual fund risk
An article in Times of India advises investors to manage mutual fund risk by focusing on asset allocation based on financial goals and risk tolerance, rather than recent fund performance. The author,…
The Story in Brief
An article in Times of India advises investors to manage mutual fund risk by focusing on asset allocation based on financial goals and risk tolerance, rather than recent fund performance. The author, CEO of Paisabazaar, explains that different asset classes behave differently under market conditions, and proper allocation balances growth with stability.
Diversification across and within asset classes is also crucial. Within equity, spreading investments across large, mid, and small cap funds can reduce concentration risk. International exposure may hedge currency depreciation. The article suggests these strategies help align portfolios with goals while mitigating volatility.
The Indian Opinion
The common narrative that picking the best-performing fund guarantees returns is misleading. As the article rightly points out, past performance does not reflect risk alignment. Indian investors often chase short-term gains without considering their own horizon or tolerance. The real test will be how many actually rebalance their portfolios instead of chasing last year's topper.
Source: timesofindia.indiatimes.com
This story was synthesised by AI from the source linked above.
