The fund house in its report said that in the longer-term, large, mid and small-cap indices are largely in line, with small caps lagging marginally. Returns have been broad-based across sectors, with more sectors outperforming the BSE100.
Sectors like IT, metals and healthcare have been the best performers while banks have been the worst performers followed by oil and gas.
The fund house believes that Balanced Advantage Funds remain a preferred strategy for new and conservative investors.
“Add value focused strategy as a tool to diversify or broaden core equity allocation. Small cap focused strategy remains an essential component in value “toolkit” for diversification. It is not the time to increase equity allocation instead. Reallocate existing allocation. Still a market to buy on “dips” rather than “reduce equity allocation,” says Anoop Bhaskar, Head – Equity, IDFC AMC.
According to the report, global markets are up 28 percent since pre-pandemic levels. Indian markets are among the best performing global markets, ahead of even the US and significantly ahead of emerging markets.
Despite the sharp run-up in the market, IDFC Mutual Fund believes that there are some factors that investors need to be cautious about.
India’s premium to emerging and developed markets is significantly above historical levels. Despite strong earnings recovery, sales growth has been tepid.
The market has seen an extended run without a correction and that’s concerning. With global volatility rising, the probability of a correction seems high. Apart from that, the frenzy of IPOs and other primary issuances can suck liquidity out of markets.
