By: Punam Sharma
A large majority of successful investors have made their fortunes on the credo of the world’s most successful investor Warren Buffett. It is – “Be fearful when others are greedy. Be greedy when others are fearful.”
This is contrarian investing at its heart – the strongly-held belief that the worse things seem in the market, the better the opportunities are for profit, and vice versa.
However, the way most investors behave in a completely opposite manner – they are attracted by short-term returns, get greedy and enter equity markets when they are expensive – like at the start of 2008. On the other hand, these very people are struck with fear and decide to sell out when the near-term returns look bad – like at the start of 2009.
Now, prudent investing demands the exact opposite in terms of behavior i.e., moving out of equity when markets get expensive and moving into equity when markets get cheap.
However, since investors find it very difficult to not give in to their emotions and often follow what others are doing, they end up on the side of imprudence. This is about to change. At IDFC Mutual Fund, we have set out to challenge this issue that investors face through our latest mutual fund offering – the IDFC Dynamic Equity Fund.
The core aim of this fund will be to be contrarian i.e., to buy less equity when markets get expensive and more when markets get cheap.
In fact, this fund has the flexibility to move from 100% to an effective 30% equity exposure (post hedging) to dynamically reduce exposure to the latter as the stock market gets expensive and vice versa.
Thus, if you wish to invest by the credo of Warren Buffett, the world’s best equity investor ever, IDFC Dynamic Equity Fund is what you need in your portfolio.
This product is suitable for investors who are seeking* :
- Create wealth over a long period of time
- Investment predominantly in equity and equity related instruments across market capitalisation
- High risk. (BROWN)Risk Categories
Note: Risk may be represented as:
(BLUE) investors understand that
their principal will be at low risk
(YELLOW) investors understand that
their principal will be at medium risk
(BROWN) investors understand that
their principal will be at high risk
*Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY.
The Disclosures of opinions/in house views/strategy incorporated herein is provided solely to enhance the transparency and should not be treated as endorsement of the views or as an investment advice. The information/recommendation provided is for informative purpose only and may have ceased to be current by the time it may reach the recipient, which should be taken into account before interpreting this document. The decision of the Investment Manager may not always be profitable, as such decisions are based on the prevailing market conditions and the understanding of the Investment Manager. Actual market movements may vary from the anticipated trends. This information is subject to change without any prior notice. The Company reserves the right to make modifications and alterations to this statement as may be required from time to time. This update has been prepared on the basis of information, which is already available in publicly accessible media or developed through analysis of IDFC Mutual Fund. Neither the IDFC Mutual Fund / IDFC AMC Trustee Co. Ltd./ IDFC Asset Management Co. Ltd nor IDFC, its Directors or representatives shall be liable for any damages whether direct or indirect, incidental, punitive special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information.