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There have been several factors responsible for the downward curve in mutual fund performance since June 2018. Read on to know how the new move by SEBI has made MF small investor-friendly, and some schemes that are suitable for such investors despite the grim capital market scenario.
A string of socio-economic incidents, one after the other, have influenced the negative growth of the Indian stock market since June 2018. The only redeeming feature in the slumping capital market has been the consistent inflow of investments from mom-and-pop investors, i.e. small investors. The trend has continued well into 2019 as well. An unprecedented record of a purchase of shares worth a whopping Rs. 1.18 trillion has negated the outflow of foreign investments evaluated at $4.5 billion.
Needless to say, factors that are impeding the growth of the capital market have been responsible for the weak performance of mutual funds since June 2018.
Here are some of the predominant reasons that have led to the downward performance of mutual funds since the second half of 2018:
Here are some of the best mutual funds to invest in 2019:
DSP Small Cap Fund : DSP Small Cap Fund is especially tailor-made to invest in stocks of small cap organizations with the objective of assuring investors of long term capital growth. The past return on investment was -23% after 1 year of staying invested in the scheme, 12% after 3 years and 21% after 5 years.
Axis Long Term Equity Fund : Axis Long Term Equity Fund aims to generate long term capital growth by investing in diverse equity related securities. The past return on investment was 6% after 1 year, 13% after 3 years and 17% after 5 years.
According to the Association of Mutual Funds in India, there has been a visible growth from Rs. 12 billion to Rs. 80 billion per month. A considerable contribution towards equity investment plans is made by mom-and-pop investors, especially in the recent past. This has gone a long way in cushioning the market against global shocks through rupee cost averaging. Uncertainties driven by the current trade tensions and the upcoming general elections to be held in May will continue to intensify the capital market volatility for a while longer. In such a situation, small investors will keep playing a dominant role in testing the market stickiness in the coming months leading to the May general elections.
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