Nilesh Shah, Radhika Gupta And Kalpen Parekh Share Investment Strategy For Samvat 2080

Inflows into Indian mutual funds rose in Samvat 2079, thanks to rising contributions into systematic investment plans, according to experts. Can such a momentum be sustained?

Here's what some of India's top fund managers have to say about investment strategies for Samvat 2080, and what has worked so far for retail investors.

Kotak Mahindra AMC Group President and Managing Director Nilesh Shah highlighted that in most emerging markets, entry for investors is easy but exit is difficult, though that's not the case in India.

"In Indian market, exit is easy. Between October 2021 to June 2022, almost $32 billion plus worth of equities was sold by FPIs," he said, further noting that Indian investors have shown resilience in the face of selling by foreign portfolio investors, which "has reduced the beta risk relative to other emerging markets".

"All kudos to mutual fund distributors and retail investors who participated via mutual funds to ensure last Samvat was good and I would expect it to continue in the next Samvat," he said.

Shah also highlighted challenges he sees in the U.S. economy with poor fiscal management and effects of high interest rates that can lead it into a recession.

"If U.S. slows down or enters recession, there will be impact on Indian IT and pharma companies, but we can make up for it through domestic consumption and investment growth," he said.

The combination of three factors—'formalisation' of unorganised sector, 'financialisation' of Indian savings and 'functionalisation' of Indian companies leading to competitiveness—creates better growth opportunities, the fund manager said.

Edelweiss AMC MD and Chief Executive Officer Radhika Gupta highlighted how SIPs have worked well for Indian investors and entered mainstream parlance.

A 10-year investment horizon for investors opting for the SIP route in the equity segment can make meaningful returns, even in a 0-10% flat range, she said.

"SIPs solves a problem for investors—one of getting into a savings habit and then earning a meaningful return on it. I believe the Rs 16,000 crore SIP book we have will probably be about double the size of Rs 30,000-35,000 crore five years from now," she said.

She also expressed optimism in Indian entrepreneurs, backed by domestic investments, building successful businesses in this decade and taking the India story forward.

DSP Mutual Fund MD and CEO Kalpen Parekh said Indian investors who remain invested, have a diversified portfolio and take advantage of multiple asset classes are doing well.

"The beauty of Indian investors is embracing volatility and acknowledging it always exists and not running away from it," he said.

Speaking about strategy, Parekh said it would be 'divide and rule'. "Divide asset classes across Indian and global stocks, gold and silver and bonds... India is probably the only emerging market where equities have done better than gold," he said.

Amid global uncertainties, over time volatility will be prevalent, and investors are advised to remain disciplined and keep long-term time horizon and diversification as keys to their arsenal.

Watch the full conversation here: