Mutual Fund Investment in the Time of Corona – 2020

The market is concerned with the widespread and impact of the Covid-19 (Novel Corona Virus). The CBOE volatility index (VIX), an indicator of volatility in equity markets widely tracked has been at multiple year peaks and in recent months, highly volatile. In recent weeks, the Indian equity markets experienced severe uncertainty. The uncertainty reflects worldwide business market conditions.

The returns from mutual funds were affected hard by the coronavirus outbreak. However, history has shown better returns on stocks and mutual funds have returned. Keeping this in view, here is a list of the mutual funds selected, which have undergone these challenging times and are anticipated to recover faster and more strongly once you have combated this epidemic.

mutual-funds-in-corona-time

  1. Index Funds

Index funds are still a major alternative because the stock market benchmark has fallen to their multi-year lows and buyers may buy index fund units at a much cheaper price. The indices are designed by respected firms in all sectors. The indices should continue to set when businesses return to their maximum output until the Coronavirus is suppressed. Investors will also earn outstanding returns since the indexes are expected to produce over the long run.

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  1. Overnight Funds

You should start trading in mutual funds for the night if you are risk-averse with a limited investment period. These are open-ended bond funds, which primarily invest in one-day maturing security and properties. Such funds are not subject to a significant risk, because they invest in shares that maturity within a matter of hours or days.

  1. Equity Funds through SIP

The net asset value (NAV) of the equity funds is now diminished because of a market slowdown caused to a certain degree by the spread of Covid-19 and the crisis of Yes Bank to some extent. The NAV of most funds is currently at a lower level after many years. This makes the time ideal for the purchase of additional fund units using a systematic investment plan (SIP) and for long term (5 years or longer) investment to benefit.

You benefit from the average cost of the rupee by investing through SIP. You can eventually purchase further fund units as markets fall, as is the case. You’ll purchase fewer units as the markets start firing. Thus you would benefit both from markets up and down in the long term by investing in equity funds via SIP.

The markets will rebound over the next few days though the Coronavirus is active. Now is the best moment to engage in equity-based options as several companies have been dropping their market values for many years. Over the long term, this should be incredibly valuable.  Get started now with smart investments!