Most of the equity-linked mutual fund schemes have touched new highs with the bull-run in the capital market continuing on Wednesday, despite intermittent profit-booking by a few investors.

Of the 345 open-ended equity schemes of mutual funds, about 265 hit new highs on Wednesday. What’s more, the party is expected to continue!

Market sentiment has turned positive following the roaring success of the BJP in the recent Uttar Pradesh election. A clear majority in UP could see BJP wielding an upper hand in the Rajya Sabha in the coming days, enabling it to push its reform agenda more vigorously.

Siddharth Bothra, Senior Vice-President, Motilal Oswal AMC, said though many investors feel that the market is overheated there are select pockets which are still attractive. For instance, he said, a large-cap fund of Motilal Oswal touched a new high on Wednesday as it had 16 per cent exposure to the insurance sector which has not found favour with many fund houses.

‘Make a study of plans’

“Without getting disturbed by upheavals in the equity market, investors with five-year investment horizon will always do well.

“Before investing their money in any mutual fund, investors should study the scheme thoroughly to understand its exposure,” he said.

With investors moving from the physical market (including gold, real estate and other commodities) to the financial market, inflows into mutual funds should continue as their awareness improves, said Bothra.

Karthikraj Lakshmanan, Senior Fund Manager (Equities), BNP Paribas Mutual Fund said despite opening on a negative note, the Sensex closed in the green for the sixth consecutive day.

Foreign institutional investors started the new financial year on a positive note, buying Indian equities worth ₹534 crore, while domestic institutional investors bought shares worth ₹33 crore on Monday.

Positive bias

Interestingly, Sneha Seth, Research Analyst, Angel Broking, said many PSU banking counters in the derivative segment added fresh long positions just ahead of the important RBI Monetary Policy meet slated for Thursday, hinting at positive bias in a majority of banking counters.

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