Market rout, what next?

Stock markets witnessed the worst week since the global financial crisis in 2008 as virus-related disruptions fueled fears of a recession in the US and Eurozone. Benchmark US indices S&P 500 and NASDAQ fell over 10%. While the speed of correction is scary, do note that this is not the first time this has happened. In fact, this is the 47th worst 6-day correction in the US Dow Jones index in its over 100+ year price history.

Of course, investors are asking what next? In a twitter poll we ran, while 35% of investors voted the time to buy the dip is now, around 39% of investors chose to SIP and chill.

We are big fans of sticking to your plan and your asset allocation. If your plan was to buy on dips, do that. If it wasn’t, don’t. Don’t buy on dips just because your friends are. Similarly, sell if you need the money for a planned expense. Don’t sell thinking you will be able to buy back lower, it is easier said than done. In short, no one knows how this will actually play out. So keep it simple.

We have written previously on how to manage emotions during market turmoil, you may want to read that again –

 

 

Gold is up over 10% in 2020 thanks to risk aversion due to coronavirus. Gold prices hit a record high in India this week, as Gold is an effective portfolio diversifier in times of crisis, besides being a shield against inflation and a lender of last resort during economic uncertainties. All top 5 best performing funds this week were gold funds. Our founder and CEO Gaurav (@rustapharian) spoke with CNBC-TV18 about investing in Digital Gold.

 

Investing In Digital Gold

As risk aversion prompts a big spiral up in gold prices today we look at the option of investing in digital gold. How does it work? And what are the advantages & disadvantages of this option vs other financial forms of investing in gold like Gold Funds or ETFs. We discuss with Gaurav Rastogi, Founder & CEO of Kuvera.

CNBC-TV18 यांनी वर पोस्ट केले गुरुवार, २७ फेब्रुवारी, २०२०

 

Index Returns

Index 1W 1Y 3Y
NIFTY 50 -7.3% 3.8% 8.1%
NIFTY NEXT 50 -7.6% -0.1% 2.7%
S&P BSE SENSEX -7.0% 6.8% 10.0%
S&P BSE SmallCap -7.0% 0.1% 0.0%
S&P BSE MidCap -7.0% 2.0% 2.5%
NASDAQ 100 -10.4% 19.2% 16.7%
S&P 500 -11.5% 6.1% 7.7%

Source: BSE / NSE

 

Top 5 best performing funds

Name 1W 1Y 3Y
Kotak Gold 2.9% 28.6% 12.3%
IDBI Gold 2.3% 25.8% 10.6%
HDFC Gold 2.1% 25.8% 11.6%
Axis Gold 2.0% 26.5% 11.6%
SBI Gold 1.9% 27.5% 11.9%

Source: Kuvera.in

 

Top 5 worst performing funds

Name 1W 1Y 3Y
Nippon India US Equity .. -12.6% 9.1% 15.0%
DSP World Energy -11.8% -11.4% -2.0%
Invesco India Feeder Global E… -11.6% -1.4% 5.6%
Franklin India Feeder US Opp… -11.3% 13.3% 16.6%
HSBC Brazil -10.5% -10.0% 2.0%

Source: Kuvera.in

 

What Investors Bought

We saw the most inflows in these 5 Funds –

Name 1W 1Y 3Y
Axis Bluechip -5.2% 19.7% 18.0%
Parag Parikh Long Term Equity -7.0% 9.1% 11.4%
Axis Focused 25 -5.6% 19.9% 15.9%
Kotak Standard Multicap -6.8% 10.2% 9.8%
UTI Nifty Index -7.3% 4.8% 9.2%

Source: Kuvera.in

 

What Investors Sold

We saw the most outflows in these 5 Funds –

Name 1W 1Y 3Y
Nippon India Arbitrage 0.5% 7.3% 7.0%
HDFC Hybrid Equity -5.3% 4.7% 4.8%
L&T Emerging Businesses -6.0% -4.9% 4.1%
ICICI Prudential Equity Arbitrage 0.4% 6.6% 6.6%
ICICI Prudential Value Discovery -7.3% -0.3% 2.7%

Source: Kuvera.in

 

Most Watchlisted Fund

Top 5 funds added to watchlist by Kuverians

Name 1W 1Y 3Y
Axis Bluechip -5.2% 19.7% 18.0%
Axis Focused 25 -5.6% 19.9% 15.9%
Axis Long Term Equity -5.7% 19.0% 15.3%
SBI Banking & Financial Services -5.4% 22.2% 18.6%
Mirae Asset Emerging Bluechip -6.4% 14.8% 12.1%

Source: Kuvera.in

 

Top ELSS funds

Name 1W 1Y 3Y
IDBI Equity Advantage -4.7% 10.7% 9.8%
Motilal Oswal Long Term Equity -5.0% 17.8% 11.0%
Parag Parikh Tax Saver -5.1% NA NA
Aditya Birla Sun Life Tax Relief96 -5.1% 5.7% 10.1%
BOI AXA Tax Advantage -5.2% 23.9% 13.3%

Source: Kuvera.in

 

Movers & Shakers

1/ Aditya Birla Sun Life Mutual Fund has announced that Claude A Accum has ceased to be an Associate Director of Aditya Birla Sun Life AMC Limited with effect from 24 February 2020.

 

Quote of the week:

 

 

But the world is ever more interdependent. Stock markets and economies rise and fall together. Confidence is the key to prosperity. Insecurity spreads like contagion. So people crave stability and order.

: Tony Blair

 

 

Interested in how we think about the markets?

Read more: Zen And The Art Of Investing

 

Watch/hear on YouTube:

Start investing through a platform that brings goal planning and investing to your fingertips. Visit kuvera.in to discover Direct Plans and start investing today.

#MutualFundSahiHai, #KuveraSabseSahiHai!

2 Responses

  • Ram Singh

    March 2, 2020 AT 19:51

    Thanks for launching Digital gold. I am really interested in diversifying my existing portfolio. I have a query before I buy Digital Gold through Kuvera, which is, How Kuvera ensures that I might not become victim of “counter party risk” down the line? I am not saying Kuvera or its associates would default. Its just I am considering worst case scenario. This thought is troubling me. Makes me wonder “Is physical gold is any day better than digital gold ?”, since “its not really my gold until I have it in my hands”. Third parties might play nasty games when I would really need to liquidate digital gold holdings during my rainy day down the line.


    • Gaurav Rastogi

      March 3, 2020 AT 02:37

      The entire process has checks and balances. There is a security partner (BRINKS) and a custodian (IDBI Bank). Of course, all risk can never be mitigated, just as a robbery at home or bank locker can also happen but the probability of it is very very low.


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