Best MFs for new investors to play Sensex @ 51K | Economic Times

As the Sensex continues its bull run, many mutual fund investors are waiting on the sidelines to start investing. These investors are waiting for a correction put in their fresh investments. However, with each passing day the Sensex has only been going up. If you are a new investor and want to start investing in this market, mutual fund experts believe that there are some categories that can help you ease out the volatility.If you are a new investor with a small corpus and don’t want to take too much of pressure thinking about debt and equity schemes, BAF can be your friend. BAF aka Balanced Advantage Funds are a category that can shuffle between equity and debt according to the market condition. Many fund managers have been recommending these schemes considering the volatility in the market.“For new investors, who want to get their feet wet with equity, and yet have some cushion build into their portfolio, we recommend Balanced Advantage Funds (BAF) as a category. BAF can give equity upside with downside protection in extreme, increasing the holding power of new investors, who are yet to experience volatility and calibrate their risk appetite. It also saves them from questions of how to time the markets, and provides both an equity and debt component in one platter,” said Radhika Gupta MD and CEO Edelweiss Asset Management Limited.Balance advantage funds have offered 13.95% returns in the last one year. The toppers in this category have been offering around 25-27% returns in one year. Even though many mutual fund managers believe that these are the best bet for new investors who don’t want to invest into multiple schemes, some managers have different views. Some mutual fund managers say that if these new investors have a long term investment horizon and the risk appetite, they should invest in pure equity funds.“If you want to invest in equity for a long term and have the risk appetite for it, I would suggest not going for a hybrid scheme. Investors who want to take moderate risk in equity can bet on pure large cap schemes. Those who want to play a little more and want to keep it to the fund manager to allocate among market caps, can go for flexi cap funds. These schemes give you a pure equity allocation and can give higher returns in the long term,” says Jinesh Gopani, Head of equity, Axis Mutual Fund.Gopani believes that BAF is a good option for those investors who do not want to take the risk of pure equities and want to cut the hassle of allocating to multiple asset classes. He also says that the outlook of the market is positive and at least for the next two years, the market is going to go up, but with bouts of volatility.“Balance Advantage Funds can form your core portfolio, and as your risk appetite and investment confidence increases, you can supplement this allocation with categories like mid-cap funds and international funds,” suggests Radhika Gupta.