Three MFs you can accumulate now

The stock market is down substantially from its January high, with the BSE Sensex now trading 40 per cent below its peak value of 21000. The price-earnings multiple for the Sensex over this period has corrected from 28 to 15 based on trailing earnings, which is well below the 10-year average of 18.

What you must do now with your MFs

If you are planning to make stock market investments with a five-year perspective, this makes it a good time to initiate investments in diversified equity funds. Investors who already have equity funds in their portfolio should view this as a good time to overhaul their portfolio.

We suggest weeding out laggards and replacing mid-cap oriented funds with those that have a large-cap orientation. With stock selection likely to become more challenging in the year ahead and liquidity likely to remain tight, we think investors should stick with exposure to funds with a proven track record over both a bull and bear market.

These may hold greater potential to participate in a market recovery, as and when it materialises. Here are three funds that investors can accumulate for the long term.

Text: Business Line

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