Fortify your equity portfolio by diversifying into value-oriented funds

Both value and dividend yield funds benefit from market downturns by investing more aggressively on such occasions

With the markets scaling new highs over the past few days, valuations have also moved up. The Nifty trailing 12-month price to earnings (P/E) ratio is now at 34.18, about 34 per cent higher than its five-year average of 25.45. If you are worried that a correction in the near future could dent the value of your portfolio, book some profits and bring your equity allocation back in line with your long-term asset allocation. Another step you could take to make your portfolio more resilient is to bring some style diversity into it by including value-oriented funds.

Value funds: They