Here are the dynamic funds that held up better in falling equity markets

  • Year 2018 promises to be volatile for equity markets, with the US Fed promising three or even four rate hikes and the European Central Bank too reducing bond buying 
  • These measures could reduce liquidity and cause volatility in equities 
  • Past data show that among equity fund categories value funds tend not to fall steeply when markets are declining 
  • Since they don't invest in high PE, momentum-oriented stocks, they tend to correct less
  • Dividend yield funds invest in stocks that offer high dividends. The portfolio's dividend yield acts as a floor and stems its fall 
  • Dynamic equity funds, which reduce exposure to equities as markets rise, are well placed when markets begin to fall  
  • International funds offer diversification into foreign markets which don't always move in sync with Indian stock markets, and can therefore be a good hedge 

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel