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POSTED BY ON May 29, 2011 10:59 pm COMMENTS (2)
Hi,
Just thinking about a new (for me!) mutual fund strategy which can be used instead of SIP:
Everytime – nifty goes down by 1% buy mf units worth rs. 1000.
Invest in mutual fund for long time – 5+ years.
Alternatively, an excel file can be prepared of major holdings of the fund you are interested in. And 1% rule may be applied to sum of change in % of these scripts.
Time: Most fundhouses/brokerage have cut off time of 1pm/2pm to buy MF at today’s NAV. so can place order before that time.
I think this method can be most useful in midcap funds due to high variation in prices. Also, this can be applied to Gold ETF or any thing you like.
I want to backtest this strategy but too busy. Can anyone help?
Also, pls give your views on it….
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@Dweep
similar to your strategy i came across a variety of sip in fundsindia i.e. VIP(Value-average Investment Plan) – which allows to invest more when market down and less when the market is up. They also done some back testing….. just have a look whether it is useful to u – https://www.fundsindia.com/content/node/vip.do
Regards
Jagadees
backtest on what holding period ?
if it is one day holding period …. it has wee bit bad strategy to follow
as the next returns are (0.07%) as against the historical drift of about 0.06 % …there are about 494 days like that ….