The liquid funds and debt funds have started giving negative returns over the last couple of weeks after Reserve Bank of India intervened and tightened the liquidity, personal finance expert, Feroze Azeez, Anand Rathi Private Wealth Management said.
In an interview to CNBC-TV18, Feroze Azeez, Anand Rathi Private Wealth Management shared his views on how one should approach gold and mutual fund from a long-term investment perspective.
Should you invest in fixed maturity plans now?
Below is the verbatim transcript of Azeez's interview with CNBC-TV18.
Caller Q: I have been investing in mutual funds with the aim of earning decent returns. I have invested about Rs 5 lakh with a two years horizon. However the current scenario is bad and the liquid debt fund is giving negative returns. What should I do now?
A: As you pointed out that liquid funds and debt funds have also started giving negative returns over the last couple of weeks after Reserve Bank of India intervened and tightened the liquidity.
If you have Rs 5 lakh to invest and the time horizon is about two years then you should stay away from equity, still debt will have some volatility but to my mind liquid fund have given negative returns, not because of inherent nature but there was a change in the method of computation of the net asset value (NAV). I do not think it is going to be a very long phenomena, it is going to be short-lived. Therefore, you should not be too worried as long as your timeframe is two years....