Almost all the stock indexes including BSE and NIFTY has regained to around 31 or 3500 points for the past six trading sessions. NIFTY has shown a similar recovery of about 32 % from March to June 3. Still, there are many investors who haven’t seen any similar returns in their Portfolio. Still It a matter of concern it is necessary to know the differences in the Portfolio returns and the overall market performance.
The returns that you get from the portfolio depending upon the type of asset in the portfolio and in what proportion that we are invested in these securities include securities, debt, or gold. If the exposure of return is higher inequity there is a chance of higher chances of return in the Market. That is why many investors have a fear of risk and turn their Investment decision to cash or fixed deposits. The investor’s Perception can change at any point in time. If some Investors who wanted to Invest may do it through SIP (Systematic Investment plan), or systematic transfer plan (STP) which is definitely a conservative approach to avoid risk and usually does not depend too much upon equities. We can compare the overall portfolio returns with the overall market performance but the change happens due to various other reasons not a single reason.
The following are some of the causes of such a difference.
- Investment period: The period of Investment could be one reason. If the Investment had been made in the bull period you get similar returns even after the period but if we invest before or after the return period the returns can change.
- The fund that is being Invested: Different portfolio has different Strategy so the returns also vary depending upon the type of asset being invested and proportion at which asset is being Invested. Every fund has a different investment mandate and they vary according to investment styles.
Solution
According to Sreenivas Rao, CIO, PGIM India Mutual fund stated that there is no base reason for the recovery of the market, and the majority of the changes are driven by liquidity and hopes as a result of the rebound of the economic activity and lifting of lockdown.
