Tourism, infra funds most impacted as Equity NAVs slide amid West Asia tensions

Equity mutual fund schemes recorded single-day net asset value (NAV) declines ranging from about 0.2% to 3.9% on March 2, as markets reacted to escalating US–Iran–Israel tensions. While thematic and sector-focused funds bore the brunt, healthcare-oriented schemes limited losses to under 0.2%. Experts said such volatility is typical during geopolitical flare-ups and advised investors to stay invested. Among the worst hit were tourism-linked passive strategies. Tata Nifty India Tourism Index Fund declined 3.35% to Rs 8.55 from Rs 8.84, while Motilal Oswal Nifty India Tourism ETF fell 3.34% to Rs 74.95 from Rs 77.54. Kotak Nifty India Tourism Index Fund slipped 3.33% to Rs 8.06 from Rs 8.34. Infrastructure and logistics-focused schemes were not spared. Aditya Birla Sun Life BSE India Infrastructure Index Fund–Reg (G) dropped 2.84% to Rs 9.08 from Rs 9.35, and Motilal Oswal BSE India Infrastructure ETF declined 2.84% to Rs 59.44 from Rs 61.18. Kotak Transportation & Logistics Fund–Reg (G) fell 2.66%, while Groww Nifty India Railways PSU Index Fund–Reg (G) was down 2.63%. On the other hand, healthcare funds limited the downside. ICICI Prudential Nifty Healthcare ETF declined by just 0.09% to Rs 152.20 from Rs 152.34. Aditya Birla Sun Life Nifty Healthcare ETF and DSP Nifty Healthcare ETF also slipped around 0.09%. Among active schemes, PGIM India Healthcare Fund fell 0.20%, while Baroda BNP Paribas Health and Wellness Fund–Reg (G) declined 0.18%. The Nifty and Sensex fell 1.24% and 1.29%, respectively, while the Nifty 500 declined 1.43% during the session. Amol Joshi, Founder, PlanRupee Investment Service, described the correction as largely news-driven. “The market fall on Monday was news driven, where the fresh conflict that erupted over the weekend spooked investors.. This kind of volatility is par for the course for an equity investor,” he said. Ashish Gupta, CIO at Axis Mutual Fund in a note by the AMC suggested that investors should avoid reacting hastily to geopolitical headlines. “While periods of conflict can lead to short-term volatility, experience suggests that making portfolio decisions purely in response to these has often proven less effective than maintaining a long-term investment approach,” Gupta said. He added that although such conflicts test sentiment, fundamentals tend to reassert themselves over time. “Markets may fall, currencies may weaken and oil may spike. But fundamentals reassert themselves over a period of time,” he noted, advising investors to stay invested and diversify sensibly. On the 2–4% drop seen in some MF NAVs, Joshi advised investors to review concentrated exposures rather than exit equities. “Investors seeing a 2–4% fall need to take a hard look at their portfolio and ensure sectoral or thematic exposure is under control, or decide if it is worth having at all,” he said, adding that core allocations should be built around diversified large-cap or flexi-cap funds, supplemented by hybrid and asset allocation strategies. Joshi added that volatility works in favour of disciplined investors. “SIPs benefit from such volatility where your SIP amount buys more units due to lower NAV. Simply put, you are buying cheaper,” Joshi said, cautioning against stopping SIPs or exiting prematurely based on short-term news flow. Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.