P/E - A theme for Asset Allocation

P/E as a theme for asset allocation is something attempted for a long time ever since capital markets got functioning.

In India there used to be three MFs already offering P/E as a declared asset allocation theme. They are

1. F T india P E ratio Fund
2. ICICI Pru dynamic Equity Fund
3. Tata equity P/E
   

Now the league is joined byPrincipal SMART Equity Fund. Between 16 - 28 P/E of S&P CNX Nifty, it will operate with decreasing Equity component on a graded manner. at 28 P/E level of Index it will have no equity component. This plan intend to use 50% in derivatives and 50% in Stock Lending. This feature makes it risky and therefore careful evaluation of portfolio is essential both while entering and after entering.

Benchmarked against CRISIL balanced Index, intended to hold large cap stocks with same market capitalisation as that of BSE 100 members.

Please remember, P/E is not good strategy in volatile market situations. But having both P/E and D/Y funds will make you have a completed portfolio in the sense of diversification.



happy investing