June 2017

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Jun
15

Dear Friends,

As the S&P BSE Sensex and Nifty 50 continue to reach new highs, it is worth noting the contribution of domestic mutual funds to the Indian stock market, which has historically been determined by foreign institutional inflows. While there are signs of a market correction, we could also see newer highs as well with multiple factors coming into play. A normal monsoon in the country, reasonable corporate performance in certain sectors, GST implementation, sustained domestic equity inflows through mutual funds and continued overseas interest are the factors which will influence markets.

SIPs continue to be the bellwether for the mutual fund industry as investors explore options beyond traditional investments as awareness levels increase about its benefits. The fact still remains that mutual funds are still a very small part of a typical investor’s portfolio and we need to communicate its benefits vis-à-vis returns and taxation with declining interest rates in traditional savings and slump in areas like real estate and gold. Those who are not yet convinced about equities or feel the market levels are too high to enter, can test their appetite with hybrid funds like dynamic asset allocation funds (which have an allocation to equity or debt based on pre-determined models) or monthly income plans (which have a smaller equity component).

With all the noise about the markets and advice from all corners it is prudent to know that you might not get it right the first time. Investors who sold off their holdings in the 2008 market meltdown at a loss would have missed out on the boom which happened in the later years. One of things which is important at all times is to ignore these market movements, which are part and parcel of investing, and stay committed to investing for their financial goals. Sound financial planning which simply means planning your expenses and investments in a tax-efficient way and an access to a trusted financial adviser are very important. The potential and means to create wealth always exists but what is important is how we sustain or grow it.

India as a country is at the cusp of a sustained long-term growth trajectory with a lot of policy initiatives being taken and it is important for investors to channel their savings into the right investments to gain from. Visit one of our SBI MF Branches or www.sbimf.com to know how mutual funds can help you reach your financial goals in life.

As always, we value your investments and look forward to your continued patronage.

Warm Regards,

Anuradha Rao
Managing Director & CEO

 

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