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While the correction is a part and parcel of equity investment, it sends jitters to MFDs and their clients. Cafemutual asked the CEOs and fund managers of leading AMCs and veteran MFDs to share their tips on how MFDs can deal with the current volatility in the market. Here is what they have to say:
Swarup Mohanty, Vice-chairman and CEO, Mirae Asset MF believes that the current year is a great opportunity for MFDs as the markets are reasonable and can be used for equity accumulation. He also thinks that due to current changes in interest rates in US, allocation in debt funds can be a good choice. He also recommends investment in gold due to the current geopolitical scenario. He concludes by saying that the current market will reward MFDs who follow the principles of asset allocation while distributors who try to time the markets will lose out.
Navneet Munot, MD & CEO, HDFC MF also echoed a similar sentiment. He advises MFDs to continue to focus on asset allocation and ensure that they don’t get swayed by the volatility of the markets and remain disciplined.
Anupam Tiwari, Head – Equity, Groww MF said that there has been volatility due to below expectation earnings growth and rise in interest rate in US but valuations in the market are becoming more reasonable. He advises MFDs to continue to follow disciplined approach and focus on right products for their clients based on their investment horizon. He also asks them to keep their focus on long-term wealth creation. He recommends SIPs over lumpsum in current volatile environment.
Alok Agarwal, Head – Quant and Fund Manager, Alchemy Capital said that Indian markets are a long-term success story which is still intact. The recent correction is due to multiple factors including earnings and economy slowdown, high valuations in the market and a sell-off in the emerging markets in favor of US. He thinks that MFDs should use the correction to build portfolio for the long-term.
Siddhant Chhabria, Associate Fund Manager, Mirae Asset MF thinks that 2025 is expected to be a volatile year due to uncertain external environment and a cyclical slowdown in Indian economy. He attributes the correction to the disappointment in the market due to low earnings growth but also thinks it has helped to clear some froth in some segments of the market. He asks MFDs to focus on SIPs and recommends diversified equity funds like – flexi cap and multi cap fund.
Pune MFD Balvir Chawla of Finnovators Services believes that the current market correction is a good time for MFDs to meet their clients and review their portfolios. He also asks MFDs to be proactive in their approach and have communication with their clients to comfort them and explain how volatility in the market can be useful for them in the long run. He suggests SIP and STP route for investment in the current market.
In conclusion, the industry veterans believe that the current volatility gives an opportunity to increase exposure to equity funds. However, they recommend MFDs to remain disciplined and follow asset allocation to create wealth. They also recommend MFDs to review clients’ investment portfolios and follow a staggered approach.