May 2017



Positive momentum continued for domestic equity indices with the S&P BSE Sensex and Nifty 50 touching all-time highs to close the month at 29,918 and 9,304 points, rising 1.01% and 1.42%, respectively. Uptrend in global equities and positive domestic developments supported the bullish sentiment. The markets were bolstered by buying in the index heavyweight and strengthening of the rupee against the dollar. Better-thanexpected corporate earnings from few index major augured well for the indices. Robust buying by domestic institutional investors also brought in gains.

Mutual funds have seen some turnaround with retail investors taking a liking to SIPs in a big way. Investments through SIPs have hit an all-time high of around Rs. 4,200 crore in April while nearly Rs. 44,000 crore came in the last fiscal. The likely factor behind this is that as the country is at a growth trajectory and the GST regime about to begin, investors want to capitalise on this growth by investing in asset classes like equity which can generate better risk-adjusted returns and invest regularly thereby eliminating the factor of market timing. Mutual Funds tick all these boxes hence are ideally placed. We believe this will only help spread the word about mutual funds and how we as an industry communicate the different benefits of mutual funds and potential to meet any financial goals – long-term or short-term – will give mutual funds as an investment option the multiplier effect.

With markets at all-time highs, we see a lot of portfolios skewed towards equity and investors exuberant with their equity-based funds delivering returns. This might be the right time to rebalance your portfolio as maintaining the right asset allocation is also crucial to achieve your financial goals. Systematic Withdrawal Plan or SWP is another useful tool available with mutual funds which can help you do this easily and tax-efficiently. Through SWPs you can withdraw a fixed amount every week, month or quarter (depending on the need) from your mutual fund investment tax-efficiently. SWPs also work well for those who have or plan to invest a large sum in order to receive a regular tax-efficient amount – for example those closer to retirement. This can be used for monthly expenses or anything else as per your need. It works similar to an SIP but in this case you are withdrawing from your portfolio systematically/regularly. If in doubt, reach out to a financial advisor near you to learn more about SWP or visit one of our SBI MF Branches.

As always, we value your investments and look forward to your continued patronage.

Warm Regards,

Anuradha Rao

Managing Director & CEO


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