Index Fund Corner
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| Scheme Name | 1-Year Return | Invest Now | Fund Category | Expense Ratio |
|---|---|---|---|---|
| Axis Nifty 50 Index Fund | +32.80% | Invest Now | Equity: Large Cap | 0.12% |
| Axis Nifty 100 Index Fund | +38.59% | Invest Now | Equity: Large Cap | 0.21% |
| Axis Nifty Next 50 Index Fund | +71.83% | Invest Now | Equity: Large Cap | 0.25% |
| Axis Nifty 500 Index Fund | — | Invest Now | Equity: Flexi Cap | 0.10% |
| Axis Nifty Midcap 50 Index Fund | +46.03% | Invest Now | Equity: Mid Cap | 0.28% |
By spreading your investments across asset classes and sectors, you can create a portfolio better equipped to withstand market fluctuations.
To create a diversified portfolio, look for asset classes with low or negative correlations, so if one falls, the other tends to offset it.
It is not just about allocating your investments across different sectors, such as banks, real estate and autos, but many other things. It is also about creating a portfolio that is diversified across asset classes, such as bonds, debt and real estate.
This strategy balances risk and reward in your investment portfolio. Diversification can help you capitalise on different market conditions and reduce your exposure to any one type of asset.
Keep in mind that your investment portfolio does not over-diversify, and a portfolio of 15-20 stocks is enough.
Here are some key strategies for diversifying your investment portfolio.
Diversify across asset classes: Allocate your investments across equity, debt, gold and real estate to create a balanced portfolio. Additionally, you can also invest in commodities like exchange-traded funds (ETFs) and real estate investment trusts (REITs). Overall, do not put all your money in one stock or one sector.
Diversify within debt: Mix short-duration bonds, long-duration bonds and floating-rate bonds to capitalise on different interest rate scenarios. This allows you to gain from rising, falling and stagnant interest rates periodically.
Diversify across asset quality: You can further diversify within debt by diversifying across asset quality. Notably, invest in bonds with lower asset quality as they offer higher returns.
Diversify equities across market capitalisation: Invest in large caps, mid-caps, small caps and micro caps to capitalise on different market cycles.
Diversify equities across sectors: Invest in different sectors, such as banking, IT, pharma and FMCG, to reduce exposure to any one particular sector, as different sectors follow different cycles.
Diversify across themes: You can also diversify your equity portfolio across themes, which means a combination of sectors. Invest in themes, such as commodities, export themes, dollar defensives and new energy.
