Never Ignore Risks While Investing in Equity Mutual Funds

Investing in equity mutual funds is always considered risky. However, what is risk and how is it quantified is not known and understood by many investors. Risk estimation and investment decisions based on the riskiness of a particular fund can be the secret of successful mutual fund investing. In our cover story we have discussed at length the concept of risk and have highlighted various ways in which one can estimate risk. It highlights how we investors almost always focus on the returns’ aspect of any mutual fund while selecting a fund.

Pure focus on returns can be detrimental and the risk components need to be evaluated. The article explains in detail how best to do that. In our special story we have attempted to objectively guide investors on crypto currency. It may be tempting for several investors to buy crypto assets now that they have corrected a whole lot. However, the risks of investing in this new currency need to be factored in. We sincerely hope readers are able to benefit from our tips on investing in crypto currencies.

A lot of things are happening in the mutual fund industry, including the newfound penchant for passive investing. While the benefits of passive investing are well-documented, we believe there is still a significant opportunity to generate alpha, especially in the space of small-caps. Those investors with a high risk appetite and with an investment horizon of more than five years can look at adding to the small-cap equity mutual fund. The small-cap funds may have a larger drawdown when the markets correct. However, the small-cap funds also have shown a propensity to bounce back sharper and faster, thus creating wealth in the process.

Yogesh Supekar
Executive Editor