Fund Manager Insights

Chirag Setalvad

Fund Manager
HDFC Mutual Fund

Key Insights:

Equity markets are volatile due to increase in global oil prices and uncertainties related to upcoming general elections.
Markets are fairly valued, small caps provide opportunities after a significant correction in last one year. However, due to current volatility, large caps are also preferred.
In banking sector, growth has picked up. Asset quality is also improving.
Consumer stocks are overly priced, not suitable to add to funds portfolio
The Small cap and Midcap funds are managed with a conservative approach.
Over long term, small and midcaps shall generate superior returns to large caps.

Gopal Agarwal

Fund Manager
DSP Mutual Fund

Key Insights:

The performance of equity markets to polarise in future to few select stocks due to machine based trading, both on the upside and the downside.
Rupee need to stabilise before the FIIs start investing in India again. However, best of the dollar rally seems to be over.
Oil and trade war pose major risk to Indian equity markets.
With falling savings rate, interest rates are expected to continue on a higher side in medium term.
Largecap and Multicap funds are favoured for next 6-12 months period.
Stagger equity investments over next 6 months through SIP/STP route.
Consumption and Financial sectors are well placed for long term, sustainable growth.

Jinesh Gopani

Head-Equities
Axis Mutual Fund

Key Insights:

Being an emerging market, India is feeling the heat of trade war between two large economies of the world, US and China.
Rising oil price and currency depreciation triggered recent volatility in the stock market
Further interest rate hike by RBI is expected in near term
Volatility in the market to continue till crude price and rupee stabilises, which may take 6-8 months.
Companies with good earnings growth will survive the market volatility and shall come out as winners.
Investment in small and midcaps should be done with minimum 5 year horizon.
Growth potential, good governance, positive return on capital employed and steady cash flows are main parameters for stock selection and portfolio construction.

Harshad Patwardhan

CIO-Equities
Edelweiss Mutual Fund

Key Insights:

Trade war between China and US will impact emerging markets for next 2 years.
Increase in crude oil prices and political instability in the country will keep the equity market volatile for next 1-2 years.
Volatility in mid and small cap is mainly due to regulatory measures taken by SEBI.
Damage in small/midcap is already done, many stocks are in recovery phase now.
Earning growth in businesses drives equity market in long term.
Next 5 years are expected to be better

Nilesh Shah

Managing Director
Kotak Mutual Fund

Key Insights:

High Valuations, Oil price increase, credit squeeze and political uncertainty are keeping stock market volatile.
Net positive investment inflows in the market, good monsoon prediction and strong fundamentals of businesses to bring growth.
Good midcap size companies are expected to show recovery in next few months.
Valuations of small and midcaps are still high. Further correction of 10-15% is expected, which shall bring valuations to fair value.
Few heavily beaten small & midcap stocks, which have poor business fundamentals, may not recover again.
India’s long term growth story remains strong. Invest in equities with a time horizon of more than five years.

Vinit Sambre

Head-Equities
DSP Mutual Fund

Key Insights:

Small & Midcap category is undergoing correction which was overdue after a stupendous run over last year
Good stocks have still not corrected to reasonable valuations
A 10 percent more correction shall make small and midcaps more attractive
Despite recent correction, long term growth story of Indian companies remains strong
DSP small and midcap funds had lowered concentration of stocks when market was high. Concentration is now gradually increased
Returns expectations from equities should be muted over next 1 year

Harshad Patwardhan

CIO-Equity
Edelweiss Mutual Fund

Key Insights:

Volatility in stock markets shall remain high for next 12 months due to political reasons, within India and outside India as well.
There are signs of corporate earnings gaining pace after a flat period of last 3 years. Improvement in earnings is necessary for the markets to remain steady or to gain significantly from here.
Certain pockets of mid and small caps are overvalued but investment opportunities are available in this space from a 3 year plus perspective.
Unfair to compare large and midcap benchmarks as their sector composition is very different.
Multicap funds are well placed to tap the opportunities across market capitalisation, hence a preferred investment option.
However, investors willing to remain invested for a longer period amid high volatility, may allocate a part of portfolio to midcap funds for higher returns over large cap funds.
Focus of Edelweiss mutual funds is to create consistent outperformance vis a vis the benchmarks through active management of funds through a combination of strategic and tactical allocation.

R Srinivasan

Head-Equity
SBI Mutual Fund

Key Insights:

Focus is on finding investment opportunities in Indian companies rather than worrying too much about global factors, as Indian mutual funds invest primarily in India only.
All SBI mutual fund schemes have been defined in fixed templates and they are managed exactly as per the templates.
The stock selection is analyst and fund manager driven but what kind of stocks can become part of a portfolio is dependent upon its fixed template.
Stocks with long term growth potential are favoured over cyclical, short term bets.
Investors should tone down their returns expectations to 15% per annum from equity funds for next 3-5 years

Vihang Naik

Fund Manager
L&T Mutual Fund

Key Insights:

Indian equity market is not cheap, but not in bubble zone also
Individual sectors like real estate are deep valued are present fair investment opportunities
Small & midcap segment is not uniformly valued. There are several stocks which are not researched actively, hence present attractive investment opportunities.
L&T Midcap Fund invests 70% in high quality mid size companies and 30% in deep value small & mid size companies
The strategy has successfully outperformed the category with lower volatility
Individual stock selection is key to out performance of small & mid cap portfolio and one should invest for long term with minimum 3 year horizon

Sonam Udasi

Fund Manager
Tata Mutual Fund

Key Insights:

Globally equity markets are seeing a bull run, and India is no exception
Low cost funds, easy liquidity, are getting invested into riskier assets
Indian bull run to remain intact with few in between hiccups
Enough investment opportunities available in the market from 3-5 year perspective
Markets may deliver 8-10 percent returns this year, funds may deliver 8-20 percent
Active cash calls taken in managing the funds to buy at the right price
Prefers a portfolio of 45-60 stocks in the funds

ANAND SHAH

Deputy CEO and Head of Investments
BNP Paribas Mutual Fund

Key Insights:

Globally, the monetary easing by federal banks was supposed to revive growth through investments and job creation. Instead, the easy money has moved to stock markets and made the equity valuations expensive across the world.
Higher spending by Indian government in road, railways and defence may impact its fiscal deficit, thus resulting in stability or firming up of interest rates in next few months.
The RBI may not go for any for rate cut and instead may increase rates marginally to keep pace with inflation, which may elevate due to rising crude prices.
The Indian stock markets are not cheap but are also not in a bubble zone. Rising inflation and crude prices may impact the market's forward journey. Though first leg of inflation is good for equity markets, a prolonged rising inflation may result in correction in equities.
Multicap and balanced funds are well placed to provide superior risk adjusted returns over medium to long term.
Investments may be planned in staggered manner in equities through SIP and STP mode.

Prashant Jain

Chief Investment Officer-Equity
HDFC Mutual Fund

Key Insights:

Due to healthy reforms and demographics in India, foreign and institutional investors are bullish on Indian equities.
Demonetisation and GST are major reforms, hence there has been an adverse impact on GDP growth. Even after such large scale reforms, the country is growing at a healthy pace of 6% plus. GST shall be very beneficial for economic growth over long term.
Government spending on roads and railways, affordable housing, Mass Rapid Transport System (Metro trains in various cities) and project like bullet train shall in the coming years push growth, specially in infrastructure sector.
Capital infusion by government and proceedings under NCLT shall reduce NPAs in banking system.
Index has kept pace with economic growth of 15% over last 38 years, and should sustain the same growth rate over many years to come.
Large caps are better positioned and valued to offer superior returns than mid caps.

Jinesh Gopani

Head-Equity
Axis Mutual Fund

Key Insights:

Demonetisation and GST have affected SME sector adversely, which is reflecting in recently stated GDP figures.
Infrastructure need is huge in the country but there are not enough funds or developers to meet the requirement.
Currently, IPOs are being launched at hefty valuations leaving very little value for investors. This signifies overheated markets.
Recent correction in stock market is healthy for investors as funds can buy existing portfolio stocks at lesser valuations.
Long term investors have buying opportunity at every market correction.
All Axis schemes are managed within a template defined for that respective fund.
Primary focus is on bottom-up stock picking and not to emulate the benchmarks.

Soumendra Nath Lahiri

Chief Investment Officer-Equity
L&T Mutual Fund

Key Insights:

Equity markets are doing well not only in India but globally as well due to high liquidity and benign interest rates.
Historically, Indian stock markets have been driven by FIIs. The situation has changed and domestic inflows are now strong and are matching foreign inflows. This shall reduce volatility in Indian stock markets.
Currently, the capacity utilisation is low, primarily due to excess capacity that was created few years back. Only when capacity utilisation of corporate India touches 85%, new private investment shall happen. Currently the Capacity utilisation is approx. 73%.
Real Estate companies(not real estate itself) and domestic consumption shall drive growth.
Small caps are under researched and provide opportunity to create attractive wealth.
Selection of good stocks with good weightage creates outperformance over a broader market.

Sudhir Kedia

Fund Manager
Mirae Asset Mutual Fund

Key Insights:

Mutual funds are more tax efficient, transparent and comparable than PMS(Portfolio Management Service)
Advantage of PMS is that personalised portfolios can be created based on themes of investor choice e.g. a 10 stock portfolio, 4 sectors portfolio etc.
Both Mutual Funds and PMS may outperform each other on cyclical basis. Over long term, the returns of both types of investments may not be very different.
Focus of Mirae Asset Fund House is to limit the downside, while providing upside with superior selection of stocks and by altering weights of stocks in the portfolio.
Investment opportunities exist in stock market irrespective of market valuation. If not in a newly discovered stock, then by altering weights of stocks in existing portfolio.
Mirae Asset Prudence Fund, a balanced fund, tends to have same sector allocation as the nifty, however the stocks in the portfolio may be different from nifty stocks.

Harsha Upadhyaya

Chief Investment Officer-Equity
Kotak Mutual Fund

Key Insights:

Equity valuations in large caps are stretched, and even more stretched in mid and small caps.
Recovery in earnings is important for market to reach and sustain new highs.
Continuous flow of investments in equity from mutual funds and pension funds shall limit the downside of the market, if it happens.
Time correction happening in small and midcaps, may continue for sometime till valuations become reasonable from current position.
Multicap funds are more suitable to invest at this point of time, that too in staggered manner.
Investment in midcaps should be made with at least 5 year horizon.
Investors should tone down their returns expectations, as past returns may be difficult to replicate in near future.

Sohini Andani

Sr. Fund Manager
SBI Mutual Fund

Key Insights:

Federal Banks all over the world have stabilised the global markets with ample liquidity.
Indian equity market is getting fund inflows from FIIs, provident funds and retail investors through mutual funds and insurance and also due to physical assets getting converted to financial assets.
Continuous fund inflow is driving the valuations higher and investors need to be cautious at this juncture.
Equity investments should be done at this point with at least 5 year investment horizon and with expectation of reasonable(and not very high)returns.
SIP and STP should be the preferred route of investment in equity.
SBI mutual funds portfolio are structured in a such a manner to provide upside in up markets but to contain downside in falling markets.

Chirag Setalvad

Fund Manager
HDFC Mutual Fund

Key Insights:

GST may have short term negative impact on equity market.
Midcap stocks are currently at a premium of around 20%, which is not a concern due to their growth potential for long term investing.
Investors may expect higher double digit returns from equity over next 5 years.
Preference is given to fundamental style of investing over momentum style investments.
Bottom up stock selection and quality of portfolio is prime focus.
Personal preference is towards midcaps due to higher growth potential and opportunities available in a broader market.

Neelesh Surana

Chief Investment Officer-Equity
Mirae Asset Mutual Fund

Key Insights:

Global markets are recovering after a prolonged slowdown, which shall be beneficial also for emerging economies like India.
Improved current account deficit, improved forex reserves, low inflation and growth oriented government policies indicate strong domestic macros.
India presents a long term growth story for equity investments due to favourable demographics, aspirational and educated youth and increasing per capita income
Diversified funds should be preferred for investment as they can tap new sectors and opportunities and have the potential to generate inflation beating returns
For stock selection in Mirae Asset fund portfolios, corporate governance and thought leadership of management is prime consideration besides other factors like business growth and valuations

Kartik Mehta

Fund Manager
Canara Robeco Mutual Fund

Key Insights:

Government has taken several steps for structural improvements in the economy
These structural changes shall make organised businesses much stronger, and negatively impact disorganised sector.
Several corporates are taking benefit of these changes and venturing into new businesses and consolidating existing businesses.
Earnings are improving and may see considerable improvements in 2-3 quarters.
Despite valuations being higher than historical averages, select midcaps still offer attractive opportunities for 3-5 year investment period

Shreyash Devalkar

Fund Manager
Axis Mutual Fund

Key Insights:

Government reforms like demonetisation and upcoming GST shall see shift of value from unorganised sector to organised sector.
A blend of growth and value in the portfolio is suitable for long term equity investors.
Bottom up stock picking is must in each sector as huge divergence can be seen among the companies in the same sector.
Pharma may remain under pressure for some time, IT sector may look up in future.
Challenge in micro and small cap funds to deploy fresh money. Large cap and mid cap funds pose no such problem at this moment.
Fresh money should be allocated to large and mid caps with at least 3 year horizon.

Anil Shah

Fund Manager
Birla Sunlife Mutual Fund

Key Insights:

Majority government in Centre and high GDP growth make India a favourable investment destination for global investors.
Growing population, aspirational middle class and varied business attract foreign investors.
Consistent depreciation in currency gives an advantage to India in comparison to other emerging markets.
Falling interest rate scenario is good for equity market.
Deep correction unlikely in Indian stock market. Global happening may bring some short term correction.
No new addition in business sectors in last 15 years and low free float make valuations high in the market.
Focus mainly on top down approach in managing funds.

R. Janakiraman

Vice President & Portfolio Manager–Equity
Franklin Templeton Mutual Fund

Key Insights:

Favourable demographics and rising per capita income shall drive growth in India for next 30-40 years
India presents immense opportunities for wealth creation for investors, which they should not miss
Even a compounded return of 12-15% over a long period of 25-30 years creates enormous wealth
Markets are currently in fair or 10% above fair value zone, which is not a concern for long term investing
Both large and midcaps have ample space to make fresh investments for attractive returns
Asset rebalancing is recommended when markets become highly overvalued

Lakshmi Iyer

CIO-Debt and Product Head
Kotak Mutual Fund

Key Insights:

India is very far from zero rate on bank deposits, as seen in few developed countries
In 1-2 years, the 10 year bond benchmark rate may bottom out with downward correction of 50 bps from current levels
India is a captive market, shall certainly get FII inflows in the event of loose global liquidity
She doubts rate hike in US shall happen, as it is a presidential election year
Opportunity in short and medium term debt funds to generate healthy returns over next 2-3 years
Arbitrage funds may generate superior tax adjusted returns than liquid funds over a short period

Alex NG

Chief Investment Officer-Asia Pacific
BNP Paribas Mutual Fund

Key Insights:

Indian economy is relatively stable in otherwise financially unstable world
Oil prices are down due to higher supply
Current oil prices are not sustainable, natural correction may occur over next 6-12 months
China slowdown not to impact US growth much
China's advantage is its ability to migrate up in the value chain
Positive change in India is states competing with each other to attract investments and push economic growth
Indian markets are less volatile than Chinese markets
Active fund management in India is superior due to bottom up stock picking. ETFs are not the first choice.
India is the only country with net positive FII inflows in equity

Santosh Kamath

Chief Investment Officer-Fixed Income
Franklin Templeton Mutual Fund-India

Key Insights:

Bond yields not correcting downwards due to huge supply and low demand
Even in case of rate reduction by RBI, the bonds yields may not go down much in future, due to supply coming in from states under UDAY scheme
For next 2-3 years, corporate bonds to provide higher returns, though with credit risk.
Even corporate bond fund supply may be more than the demand in next 2-3 years, hence investment should be targeted in corporate bond funds for next 2-3 years only.

Mahesh Patil

Chief Investment Officer-Equity
Birla Sunlife Mutual Fund

Key Insights:

Due to global slowdown, the nominal Indian GDP growth may be 10% in 2016
The government policies and actions are creating the foundation necessary for long term, sustainable growth.
The positive impact of government actions shall be visible in the economy in next 1-2 years.
Equity markets may remain volatile for next 3-6 months
Investors may expect 15% compounded returns over next 3 years
Balanced and multicap equity funds to provide better risk adjusted returns as compared to thematic and sector funds.

V Balasubramanian

Head-Equity
IDBI Mutual Fund

Key Insights:

Portfolio construction is key to consistent returns, and not individual stocks.
Volatility is managed through portfolio construction, do not take cash calls.
Do not take trading calls and invest in stocks with long term view.
High P/E stocks may remain in portfolio if growth potential is visible.
Fund objective is to deliver superior risk adjusted returns.

Anand Shah

Chief Investment Officer
BNP Paribas Mutual Fund

Key Insights:

India is the new growth leader. It has already become too big to ignore and is expected to become the 4th largest world economy by 2020 and 2nd largest by 2040.
Other economies across the globe are facing slow-down. India is the only bright spot for FIIs for investment.
Key to improvement in economy is job creation and keeping inflation low.
Interest rates are higher than inflation for the first time in India.
The Indian equity market is expected to remain on an uptrend for coming several years, with potential short-term corrections on the way.
The investors should not be expecting ‘Too much too soon’.
Government and RBI are working on structural recovery of the country and not on cyclical recovery.
It is the companies that create wealth, not markets. Key to wealth creation is identifying superior businesses with strong management at reasonable valuations.

Neelesh Surana

Head-Equity
Mirae Asset Mutual Fund

Key Insights:

Indian economy is in much better position than other emerging markets due to relatively more stable currency and favourable macro economic factors like low current account deficit, controlled fiscal deficit and fall in global commodity prices.
India is positively impacted by lower oil and commodity prices as it is majorly an importer.
Reasons of domestic corporates not showing improved results are lack of demand, low capacity utilization and subdued investments.
Corporate bottomline to improve more than topline on account of lower input prices.
Initiatives undertaken by government in last one year may take 1-2 years to show visible results.
Polarization is seen in the stock prices due to which quality stocks have become expensive. Mirae Asset philosophy is to look for quality stocks at reasonable pricing to generate superior risk-adjusted returns.

Anand Radhakrishnan

CIO-Equity
Franklin Templeton Mutual Fund

Key Insights:

Equity Market may not get adversely affected by Fed rate hike as this event has already got discounted. In fact, in case of no rate hike, the markets may bounce back from current levels.
Companies to report average sales growth but better profitability due to fall in commodity prices
Demand needs to pickup for a broader market rally
Market trending at near long term averages, large caps fairly valued than midcaps, invest in equities with minimum five year horizon
Balanced Funds suitable investment option for beginners and investors who wish to participate in growth with lesser volatility

Harrish Zaveri

Fund Manager
DSPBR Mutual Fund

Key Insights:

Investors should invest in equity funds with minimum five year horizon at this point
Markets might see some correction due to event risks like US Fed rate hike, Yuan devaluation