QuirkyDumpling
QuirkyDumpling

Overvaluation in markets due to mutual funds

Hi, does anybody here think that markets have become overvalued due to continuous inflows from mutual funds.

I don't track stock markets that much but i know that DIIs are continuously pumping in money into the stock market whereas FIIs are taking out money. Due to which market is not correcting at all.

It's just my opinion that share prices are not going at all due to people buying dips all the time either buying direct stocks or through mutual funds.

I have also read that parag parikh flexi cap fund which has gotten very popular due to its return is currently holding 15% of it's portfolio as cash due to overvaluo.

What do you guys think about this , or do you have any good material on this to understand. Thanks

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QuirkyPenguin
QuirkyPenguin

Hey, so the trend this quarter has been FII and DII have both been buying. $10 billion dollar each. Yes, market is looking stretched right now, but we can’t say for how long this cycle might last. So it might not be smart to completely avoid it, but keep some investments in fixed income/multi assets.. and for equities, look for flexicap/large cap funds.

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