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personal finance | IST

Your Investment Guide: As equity investors mature, MF experts discuss strategies to grow your wealth

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Radhika Gupta, A Balasubramanian, Ashwani Bhatia and Kalpen Parekh share their views on how investors can navigate through these turbulent times.

The world is living through an unprecedented time that will probably define history as well as the future. As people around the world battle the coronavirus pandemic, it's important to remember that there will be life beyond and free from the deadly virus. With that positive focus CNBC-TV18 has come up with an investment guide to help you identify opportunities to create long term wealth and secure your investments for the future.
Radhika Gupta of Edelweiss MF, A Balasubramanian of Aditya Birla Sunlife MF, Ashwani Bhatia of SBI MF and Kalpen Parekh of DSP shared their views on how investors can navigate through these turbulent times.
In terms of investor behavior, Gupta said, “It is pretty heartening. As far as equities are concerned, investors have remained steady so far, March numbers suggest that. I don’t think there is a material change in gross flows. For younger investors who have come in after 2008, there is some amount of anxiety, questions asking should I stop my systematic investment plan (SIP) and all the natural questions that will come in because this is your first cycle.
"We haven’t seen heightened redemption pressures as yet, I do expect that if things continue to be uncertain for a while, that could definitely change, but so far you have seen more maturity than the past and that is a function of the fact that investors are now beginning to see more equity cycles, hence are becoming better and more mature investors. On the fixed income side there is a bit of nervousness, particularly around credit, because in fixed income we are a little less forgiving,” said Gupta.
When asked if there were redemptions in equity inflows -- and if so, where do people want to withdraw their money from, Balasubramanian replied, “The investors are getting matured day by day. People are okay to continue their investment and people understand that COVID-19 virus on the market is quite unprecedented and at the same time people have come for long-term.”
“Generally the inflows into the mutual fund is quite large and given the fact that last one year has been pretty volatile and investors have been moving from one fund to other fund on the basis of the performance of last one year and two years - people will keep doing their reallocation of portfolio. Some would have seen redemption, some would have gained market share so that is a function of dynamics of each fund houses performance. Having said that, in the last one-two months, the fall which is not related to only India is related to global market, not one sector, not one stock, the entire market has fallen,” he added.
Speaking the news fiscal and market conditions, Parekh pointed out, “My experience is that in the first round when the market corrects a lot of money comes in, new money comes in because people feel this is an opportunity and next round is a function of how things evolve.”
“Therefore, if market rises without good news then there will be nervous investors who may take some money out, but if market rise up with a good news of resolution of COVID-19 and the lockdown getting lifted around the world then there will be stability. If market falls further then as in the past cycles, investors would get more nervous and reduce their exposure. So two-three weeks down the line we will get to know how each of these variables are playing out and that will give us a signal of what trends we expect in the future,” Parekh noted.
Lastly, talking about FII selling, Bhatia stressed, “You should think how long FIIs can sell; now everybody is trying to run. Is it possible to run? I don’t think so. However, domestic flows have been steady and we are telling our investors to keep the faith, add more units, don’t cancel your SIPs at this time; this is not the right time. This is the time to accumulate."