Year 2018 promises to be volatile for equity markets, with the US Fed promising three or even four rate hikes and the European Central Bank too reducing bond buying
These measures could reduce liquidity and cause volatility in equities
Past data show that among equity fund categories value funds tend not to fall steeply when markets are declining
Since they don't invest in high PE, momentum-oriented stocks, they tend to correct less
Dividend yield funds invest in stocks that offer high dividends. The portfolio's dividend yield acts as a floor and stems its fall
Dynamic equity funds, which reduce exposure to equities as markets rise, are well placed when markets begin to fall
International funds offer diversification into foreign markets which don't always move in sync with Indian stock markets, and can therefore be a good hedge
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