Fundmen want investors to be conscious of risks

Staying invested in mutual funds, especially in volatile times like these, is not enough to safeguard your money.

In addition to having chosen the best performing fund, you might also have to do some periodic risk assessment, say fund managers, faced with the most volatile markets in the last six months.

They point out that it would be prudent of investors who have seen a tremendous appreciation in their equity investments to take a re-look at their asset balance and sort out "imbalances" and "over-exposures".

"It is not our job to decide whether the equity markets have become too risky to stay invested in or not, but that of the investor," says a fund manager with a mid-tier mutual fund establishment, echoing the most widely-held sentiment on the fund scene now.

The fund house has even requested their retail agents to 'advise' investors on the 'need to periodically book profits.' "As far as I am concerned, if he leaves the money in my hands, then he wants to stay invested no matter what. If he thinks the markets are too risky, or may go down, he might as well as redeem. It is his job to pull it out and not mine," he adds.

Sanjay Prakash, CEO of HSBC Asset Management India, points out that it might be a good idea for investors in mutual funds, who have stayed invested for long enough, to take a re-look at their asset allocation.

"It always pays to stay invested for a long period of time... But having said that, it is also necessary for subscribers to make sure that due to market appreciation or otherwise, they are not overly dependent on the equity-market for their savings," Prakash adds, "If they find that a larger share of their savings are now held in the form of equities, it might make sense for them to book-profits and re-balance their portfolios."

Other fund managers too, though refusing to come on the record, point out that the risk levels in the markets have risen considerably.

"It is too much to ask if the investor expects us to be able to time the market and get out before and downturn and get back in just before it starts going back up," they point out.