With a rising risk aversion in the global markets, a number of investors are embracing a balanced strategy that combines the best of three asset classes – debt, gold and equity. With these three asset classes, investors can significantly reduce their risk, and enhance returns. For ages, gold has been the safe haven choice, while for some time now returns from short term debt have been rising, while good stocks have more often delivered fantastic returns and currently with the markets at a low, chances of a upside are more than that of a downside for the next few months. While one cannot ignore the chances of the markets dipping slightly some more in the immediate future, one fund that combines all three asset classes under one roof and provides investors a cumulative advantage is the Taurus Mutual Fund Advantage fund.
By combining all these three asset classes under a single umbrella, corporate and retail investors can meet their investing requirements for steady returns and appreciation together with safety and stability. The Taurus Mutual Fund Advantage fund provides enough flexibility for fund managers to invest in the different asset classes according to market conditions. Debt exposure would range from 65 to 95 per cent, gold 5 to 25 per cent, and equity 0-25 per cent. And therefore, for scores of investors, even those dipping their toes in investing for the first time, this fund provides a strong platform to plunge into the savings habit and at the same time without taking too much risk Mutual Fund .
Gold has been delivering unprecedented returns world-wide. Even Central banks of countries have been steadily “re-purchasing” the gold they had earlier sold off. They have realized that “over-leverage” can have serious consequences – for their economies and, as a result, for their societies.
Demand for gold (as consumption for jewelry) has been high in emerging economies such as India and China. Over the last year or so, though, demand for gold as an investment has been soaring. Global investors, particularly those that don’t have any “golden” exposure, are increasingly seeking the precious metal for its uniqueness as a hedge in an uncertain global financial environment. Besides, over the years, gold has had very little co-relation with equity movements and, therefore, provides a solid counterbalance to equity movements. Hence, adding flecks of gold to a portfolio lessens the overall volatility and swings of any portfolio.
Returns from Short term debt instruments have soared as interest rates have steadily stepped up. Debt investing, in recent times, has never been better. Inflation has been running wild, leading to the Reserve Bank of India aggressively raising interest rates. From any investor perspective, debt offers healthier returns when held for the medium to long term. The idea is to maintain a high-quality short tenure debt portfolio for the time being and move into duration management and long term high quality debt as one senses that the interest rates may not rise any longer, in order to reduce the risk of the debt and to continue making good returns from the debt portion.
Nevertheless, though equity has been at the receiving end lately, certain stocks and sectors do buck the trend, and outstrip the broader market. The current market correction, too, affords a good prospect of cherry-picking growth stocks. In the long run, studies have repeatedly shown that equities fetch better returns than other asset classes, more particularly in a growing economy such as India. Stocks add to the kicker in long-term returns.
For investors, both retail and corporate, the mix of different asset flavours can substantially reduce portfolio volatility. By mingling these three asset classes, investors can strategically participate in a portfolio that reflects the needs of the time. This is one fund that aims to provide safety and stability, and risk-adjusted returns over the far horizon. That’s the advantage of The Taurus Mutual Fund Advantage fund.