On the final day of Cafemutual Ideas Fest 2021, as many as 20 speakers addressed 5200 MFDs/advisors and provided them useful insights on markets and growing business in the post pandemic world.
Among the topics that were discussed in detail included important recent trends in the equity, debt and international markets, relationship between people and money and so on.
Among the illustrious speakers were Morgan Housel, author, The Psychology of Money, Moh Hen Meng, co-founder, iFast group of companies and Vipul Goyal, Ace Comedian.
Here are the key highlights of day 2.
Prashant Jain, ED & CIO, HDFC MF
Topic: Indian equities - time to buy, hold or exit?
- Even after market rebound, stock markets are not overvalued and are reasonable right now
- Low cost of capital and excess liquidity in the market has helped asset prices globally
- Government’s reforms around land, labour and ‘Atmanirbar’ initiative are improving economic outlook
- Moreover, government's intentions to privatize public sector companies is a great move for economy as it will bring foreign investment and improve valuation of these companies
- In fact, economic outlook of India post covid is better than pre covid scenario
- Next few decades are positive for emerging market (EM) like India, given that the last few decades were not great for EMs
Saugata Chaterjee, Co-CBO, Nippon India MF
Topic - Passive funds as a core in asset allocation
- Passive funds are currently at a nascent stage in India with a share of around 10%. However, their share in the industry AUM is expected to increase to 20% by 2025
- In US, as on Mar 2020 around 41% of the AUM was passive
- The benefits of passive funds include - (1) Risk reduction (2) Diversification 3) Collective wisdom of the market 4) Asset allocation
- It may be ideal to have an exposure of around 25% allocation to passive funds
Dwijendra Srivastava, CIO - Debt, Sundaram MF
Topic: What to expect from debt markets
- India is not likely to see decline in economic growth
- Short term investors should be careful about investing in long term bonds as volatility in rates is likely to remain
- High taxation is a worry as it is negative on consumption
- Expect money market to remain benign in near term
- This is one of the best times to be in the market as we have favourable external factors like high forex reserves, import cover
George Mitra, Founder & CEO, Fintso, Suraj Kaeley (Mentor & Coach) and Anil K Goyal (Founder and Principal Partner at AKG Associates)
Topic - Global Investing – the need and opportunities
- India has a share of $ 2.7 trillion in the world market capitalization of the total $ 87 trillion. Also, top companies under various segments like health, technology, commodity and consumer segments are listed overseas
- Winners rotate and diversification stands important. Global investments diversify the portfolio and act as hedge against the forex. The overseas market offers various themes like alternate energy and technology development that can be considered for diversification
- Invest in domestic funds have exposure to US stocks to get an understanding of the overseas markets. Also, you can invest through the Liberalized Remittance Scheme and access the listed EFTs and stocks
- To start with, broadly 10% to 30% of your portfolio can comprise of global investments. Also, you can consider beginning with investment in broad-based indices and then you may move towards sectoral, thematic, growth-oriented and value-oriented
Navin Agrawal, MD & CEO, Motilal Oswal MF
Topic: India- A lifetime opportunity
- Privatisation in Indian sectors will bring out best in Indian companies at a time when banks are struggling with NPAs
- Starting to see strong growth for FY21; even corporates earnings are reviving
- For long term investors in India, odd are extremely favourable with FIIs pumping billions in India market
- More than 50% of the best 30 days in the last 30 years were during bear market, understand that there’s an opportunity cost to sitting out
- For those trying to avoid the bear market and wish to invest after economy and corporates earnings start doing well, you may miss the golden opportunity
Raghav Iyengar, CBO, Axis MF & Dhruv Mehta, Chairman, FIFA
Topic - MFD Heroes Awards - recognizing selfless acts of heroism from the MFD community
Here are today’s winners.
- Ravi Kumar, Jammu - During the lockdown, MFD Ravi along with some of his friends started distributing ration and medicines to migrant families on a daily basis. With a local group, Ravi also made arrangements for migrants to return to their native place. Ravi has helped nearly 500 families in the last 5-6 months.
- Amit Charadava, Junagarh - Amit conducted Facebook Live sessions for people to spread awareness about coronavirus by inviting doctors. His FB live sessions received over 14k views. Amit helped covid patients with food packets and medicines. He also started affordable Quarantine centers where patients can undergo treatment at Rs.1000 per day. The cost included six time meals, doctor fees, nurse fee and medicines. Overall, he served 145 patients.
- Chandan Ghosh, Siliguri - Chandan Ghosh of Prudent Wealth Siliguri distributed warm clothes and blankets to homeless people during the pandemic. Every year his company gives clothes to orphanage of Maria Cecilia hostel during Christmas. Chandan is also associated with Sparsh which collects used clothes from people and distributes it among needy. Also, Chandan has been funding education of an orphan girl child since 2016.
- Basavaraju Angadi - Bangalore MFD Basavaraju has distributed 500 meal packets and 100 ration packets among underprivileged during the lockdown. In addition, Angadi has distributed masks, sanitisers and hand gloves to covid soldiers. Angadi has been associated with many associations to support numerous social and environmental causes.
Vetri Subramanian, Group President & Head of Equity, UTI MF
Topic: The relevance of value investing
- People associate value stocks with cheap statistical valuation of a company
- Sometimes, the difference in real valuation is because of poor cash conversion, disruption in particular business of the company, varied capital allocation, promoter distraction, treatment of minority shareholders
- Debt heavy balance sheets, corporate governance, changing regulatory and social attitudes, technological changes are some of the traps of value stocks
- Value does not mean cheap valuation multiples
- Play close attention to pitfalls that make stocks appear cheap - cash generation, return on capital employed, disruption, and management etc.
- The choice is not really between value and growth but between value today and value tomorrow
G Pradeepkumar, CEO, Union MF
Topic - How to grow business multifold by 2025
- The fundamental principle to earn customer’s trust is ‘Always do what is right for the customer’. Gain knowledge about various products to be able to give proper recommendations
- Do not limit your conversations only to the product domain. Your client would be happy to discuss the topic of his interest. Engaging in knowledgeable discussions earns you the respect of your customers
- Using technology saves time and energy. You get adequate time to focus on activities that require your attention
- Learning yoga from an instructor adds more value rather than learning through Youtube video. This holds true for your business as well. MFDs can help their customers understand how they can add value as an advisor to their customer’s financial decisions
Moh Hon Meng, Co-founder, iFAST Group
Topic: Business plan to future proof your practice
- Some overseas governments are putting in place regulations to bring more financial advisors as they are worried their citizens would not have enough money after retirement
- Governments overseas are pushing down commission and forcing advisors to charge fees to clients. This way they represents interest of clients
- Today, clients are generally more sophisticated and educative as they read stuff on internet and wish to invest in a particular product after taking advice from advisors
- Home bias is true in every market but investors with this bias are missing a whole lot of opportunities. So expose your clients to various international opportunities
- Investing globally is the only sure way that long term investment works
- Build a team of financial advisors who can specialize in niche areas
Morgan Housel, Author of 'The Psychology of Money'
Topic - Wealth, Greed & Happiness
- Risk is what you don’t see. How risky is something depends on whether you are prepared for it. Lack of preparation amplifies the consequences
- Getting rich and staying rich are two distinct things. Getting rich requires one to be optimistic about the future while taking risk, but staying rich follows a contrary approach
- The longer you hold stocks you are more likely to generate a good return. Thus, timing is meaningless and time is everything
- A good investment is not about making great decisions but it’s about consistently not making mistakes
- Each investor has different investment preferences and thus reasonable decisions can give better results than rational decisions
