Young demographics and high savings rate are opportunities for India in the long run. However, if we can’t find jobs for the youth this would be a big risk for the economy, says Atul Kumar, Head, Equity, Quantum Mutual Fund.
Can you describe the investment process
and philosophy of your fund house?
At
Quantum Mutual Fund we follow bottom up research driven investment process that
emphasizes on transparency. We try to control costs in order to benefit
investors. We aim at generating sensible, risk-adjusted returns over the long
term through a disciplined research and investment process. We focus on
corporate governance and invest in companies run by good managements and companies
which are not leveraged excessively. We invest only in liquid stocks.
What is your reading of the current state of Indian economy?
The
growth in India has slowed down considerably and it may remain below 5% in
FY13-14. On spending side of GDP, investment spending was weak and thereafter
the consumer spending also slowed down. Inflation at consumer level continues
to hover close to 9-10%, which has a negative impact on consumer spending. On
the positive side, there has been a good control on the trade deficit of India
with slowing imports and pick up in exports. Over a longer time horizon the GDP
may grow to 6.5-7% which is likely to be amongst the highest in the world.
What is your near term outlook for the
market?
We
do not have a short term view on markets and believe that when it comes to
equity, as an investor, one needs to have a long term view that does not change
every six months.
What has helped Quantum Long Term Equity
Fund maintain its stellar performance? How do you plan to sustain the performance
going ahead?
We
follow our tried and tested research and investment process that helps us to
maintain a steady performance. Some of the attributes of our investments are:
- Long term approach towards investing
- Bottom up stock selection process
- Large team of analysts
- Investing in good companies having strong
corporate governance
We
will keep following our investments and research process which is likely to
provide good risk adjusted returns.
What are the key risks and opportunities
that you observe in the market in the near term?
Over long term young demographics and high saving rate are opportunities. But if we can’t find jobs for the youth, this would be a big risk as it can lead to the social problems, so demography for India is opportunity as well as risk.
Which sectors are you avoiding currently?
We
are sector agnostic and hence don’t stick to a particular sector. We follow bottom
up investing approach.
What are the qualities that you feel a
good fund manager should have?
Apart from good analytical skills we should have emotional control in stock markets. At Quantum we follow a team based approach to take care of investor’s money.
One book which you would recommend to all investment professionals…
The
making of American capitalist authored by Roger Lowenstein.
Your advice to investors at this juncture…
Our advice to investors is not to panic or get overwhelmed with the market swings and keep holding onto their investments. At Quantum we believe investments are goal driven or need based, therefore one should ideally not withdraw their investments until they achieve their financial goal or there is any sudden financial emergency. Investors should do homework before investing and not get carried away by rumors or greed. Investors should be disciplined and put money in regular interval through SIP, etc.
