​Planning to rebalance your mutual fund portfolio amid market volatility? Here’s what experts suggest

Are you planning portfolio rebalancing amid the market volatility between equity, debt, gold, and global assets—to manage both risk and return? Here is some help, as reported by ETWealth.

A simple approach to rebalancing starts with defining the right asset allocation based on time-specific goals. In the current environment—marked by evolving geopolitics and market volatility, investors must be clear about the time horizon for each goal, according to Prableen Bajpai, Founder, FinFix Research and Analytics.

Bajpai said that for goals one to three years away, the strategy should be conservative, with 80–90% allocated to fixed income. If equity exposure is high for a near-term goal, it should be reduced to manage risk and lock in gains.

For goals three to five years away, a more balanced approach is suitable. Portfolios heavily skewed toward fixed income may consider adding 30–60% equity, depending on risk appetite and horizon, the expert said.

The expert said that the long-term portfolios should have a higher equity allocation to drive growth and combat inflation.

The expert also said that Gold and international investments should also be included. However, gold should be viewed as a diversification tool, not a return driver. A disciplined, diversified approach remains key to managing risk and returns.