MUMBAI: If you are seeking decent returns on your investment in the current, highly volatile equity market, Dynamic Equity Funds would be the way forward. The funds in this category give better returns in every cycle of the market. According to data analysed by arthlabh.com, IDFC Dynamic Equity Fund of IDFC Mutual Fund with an Asset Under Management (AUM) of Rs 1 lakh crore has given returns at the rate of 11.14 per cent in last one year. IDFC Dynamic Equity Fund, with open-ended dynamic asset allocation, is a hybrid fund that actively changes its equity relocation, based on the trailing PE (Price Earnings) of the Nifty 50 Index.
The active equity portfolio manages diversification funds as well as more relocation selections in the large-cap portfolio. This fund, however, also keeps exposure in mid- and small-cap. The approach of selecting active stocks tends to increase with quality stocks. This fund invests up to 68 per cent in equity. In the market from January 2018, only 70-80 stocks of BSE 500 have given positive returns. In the meantime, whoever has focused on high quality and income have been the most successful. In recent times, various government announcements have resulted in improvement in the atmosphere at the domestic front. The market conditions are showing improvement due to corporate tax reduction, plan to invest Rs 100 lakh crore in infrastructure and due to a balanced budget.
The IDFC Dynamic Equity Fund has an exposure of 73.92 per cent in the large-cap, and 26.08 per cent in mid- and small-cap. The minimum investment can be made with Rs 5,000. Its benchmark is S&P BSE 200 TRI and Nifty AAA short-duration bond index. With a monthly average AUM fund of Rs 979 crore, this fund was launched on October 10, 2014. However, despite the low GDP, the growth of earnings is estimated to touch double-digit figures, owing to cut in corporate tax and recovery in corporate bank NPAs (non-performing assets).
When it comes to IDFC Dynamic Equity Fund, its exposure is 68.08 per cent in equity and related resources. This fund invests in equity, derivatives, debt and money market resources. When you invest for five years or above, you can expect gains that comfortably beat the inflation rate and are also higher than fixed income options. But be prepared for ups and downs in your investment value along the way. “Dynamic Equity Funds invest in a combination of large-and-medium-sized companies, thereby providing some degree of flexibility to the fund management team to invest in companies of different sizes, depending on where it expects maximum gains. We believe this flexibility is good for fund investors,” said Rachana Somani, equity research analyst, Swastika Investmart.