In a turbulent week for the equity markets, the Sensex was down about 3% for the week. But within the week, there was a lot of intra-week volatility, about 7% downside moves were seen making many investors really edgy.

Also bond yields moved up marginally. They were between 7.5% and 7.6% range. But the big star was the commodities space. Gold and oil have hit highs. The last three months’ return on gold has been 25%, something really positive when compared it with the way equity markets have been tanking.

What do experts say as to how one should pace their portfolio in these volatile times?

Mohit Batra, Associate Director - Wealth Management at Motilal Oswal, said, "The key to get into such kinds of markets is to phase out your investments at a decent level. We would not recommend a full bullet investment at this point. But it is definitely a market where you start putting in your money in a phased out manner, depending on where the market goes over the next 1-2 months. But the valuations in total are looking pretty decent."

While Rajiv Bajaj, Managing Director of Bajaj Capital surmises,"We are reducing our clients’ allocation towards equity and increasing the allocation for debt. So, this is the broad strategy. But most importantly what we are doing is, we are creating multi-asset portfolios for our clients. That means a basket in which you have all asset classes, direct equity, mutual funds, real estate, structured products, commodities including gold, and what this does for investors is that it reduces the risk to a great extent."

Equity Linked Savings Scheme

Come March, we all get worried about the best way to save taxes. One of the most popular investment options is the ELSS or the Equity Linked Savings Scheme. These are tax saving equity diversified mutual fund schemes. They are different from ULIPs or Unit Linked Insurance Plans, which are offered by insurance companies and offer combination of insurance and investments. ULIPs have higher initial charges, while ELSS has been giving better returns over the past few years amongst all tax saving options.

So Deepak Sharma of IL&FS Investsmart, elaborates, "There are two parts to ELSS. One is, under Section 80C, which allows investors to avail exemption of tax up to 1 lakh investment in ELSS."

"Why ELSS over other investment options? I think ELSS by nature is closed-ended for at least three years. So, first of all it sets the expectation of the investors that whatever amount he is investing is meant for long-term, not for a 6-12 month horizon. We all understand that equity takes time to provide returns to investors. So, this is the second advantage," he adds.

He recommends strongly SBI and HDFC Long-term, an ELSS. he said, "They are top on a risk return basis, besides other parameters that we use for our recommendation for different schemes."

Talking about the impact on mutual funds, Ved Prakash Chaturvedi, Managing Director of Tata Mutual Fund, said, "This a tough time trying to get money from investors. But I must say that Tata Mutual Fund has been a pioneer in the infrastructure mutual fund space in India. We launched the first infrastructure fund in India, the Tata Infrastructure Fund in November 2004. As they say, the rest is history. Almost, five other similar funds have been launched by many of our peer group."

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