Month of April has been eventful, stock markets recovered from the lows it touched in march , debt funds rattled by Franklin Templeton’s decision to wind down/shut down their six of their debt schemes, this was a huge shock to all of us as we never anticipated such a move, and we are as equally sad as everyone , this has created a lot of panic, credibility issues . At this point we would reiterate and reassure that this was one of an event, we are checking all the schemes which are prone to any such risks and are taking actions accordingly. RBI has quickly stepped in and provided a pipeline of funds available to mutual funds incase they face lots of redemption pressure, which has soothed the nerves and we are slowly returning to normalcy. Our portfolios last month have recovered by 5% to 12% based on scheme allocations, so this month’s portfolio looks much better. We have been reading, listening and trying to understand how the portfolios will withstand the lockdown and ensuing affects of post lockdown, as of now we feel month of July 2020 will reveal the real effects on the economy , as the data for the first quarter ( Apr-Jun) will be released by companies , we can see the amount of stress in their balance sheets, profit and loss statements, based on which portfolios will react. Despite all the negatives is there a silver lining? Yes! we feel equity markets are quite attractive at this stage, please see the graphical representation below, which clearly indicates this is the opportunity to invest aggressively in equities if you have time frame of more than five years+. So, continue your investments through SIPs and STPs.
Also please set aside emergency funds in your bank savings/flexi accounts or mf liquid funds for six months which includes household expenses, EMI payments, Please pay off your entire credit card bills on time . Stay Safe!!