Which stock mutual funds to consider when the stock market corrects? Fund managers respond

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Russia’s attack on Ukraine and rising oil prices have plunged global and domestic stock markets into the red, with FIIs withdrawing funds by selling Indian stocks. The surge in oil and other commodities would certainly have an impact on the country’s finances and on Indian businesses, experts say.

India’s medium-term outlook remains stable and offers a reasonable advantage for investors with a horizon of more than 3 years, said Srinivas Rao Ravuri, CIO PGIM India Mutual Fund.

“Investors with a low appetite for risk should focus on Balance Benefit (BAF) funds and large cap funds. However, investors with a long time horizon may also consider Flexi Cap and Midcap funds,” said advised Ravuri on the type of mutual fund investors with a lower appetite for risk can look at the current environment.

From an investor’s perspective, this crisis highlights the risk associated with investing in stock markets and the volatile nature of stock markets. In a few weeks, we go from exuberance to extreme caution, added Ravuri of PGIM MF.

Trideep Bhattacharya, CIO-Equities of Edelweiss AMC recommended a flexible cap fund or a large and mid cap fund in the current circumstances for investors with a low appetite for risk. However, the investor’s medium-term asset allocation must also be considered in this process, he added.

“The impact of the Russian-Ukrainian conflict is more from a crude/commodity price perspective. At higher commodity price levels, it is logical to assume that some demand destruction and , therefore, in the medium to long term, these levels are not sustainable,” said Chandraprakash Padiyar, Senior Fund Manager, Tata Mutual Fund.

The risk reward is gradually improving by 1:1 towards better levels, therefore Padiyar believes that the long-term trends for higher economic growth in India remain intact and hence the stock market correction to short term can be used as an investment opportunity.

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