The assets under management of mutual funds crossed the magic figure of ₹20 lakh crore recently. Despite uncertainty over tax collection under GST and a slowing economy, equity schemes registered highest-ever inflow at ₹20,362 crore last month. BusinessLine spoke to Lalit Vij, Managing Director, Principal PNB Asset Management Company, to make sense of this bullish trend. Excerpts:
Are you comfortable with the current rally?
Though markets have gone up, investors are punishing those sectors where there is no earnings growth. I expect markets to test investors’ patience in the next few months, but it is not in bubble territory yet. Long-term investors can expect double-digit growth. The good thing is people are staggering their investment. Distributors are more cautious and advising balanced funds more. Expectations are sort of grounded. While we are bullish on India growth, we have provided global investment opportunity to Indian investors through our Principal Global Opportunities Fund.
Is steady flow through SIPs holding the market?
The flow has added a lot more stability to our markets. It is not as volatile to global developments as before. Even among foreign fund flows, I believe there is a lot of steady money coming now from endowments, large universities and pension funds. India accounts for about 8 per cent of the emerging market universe, but it gets a fair share of both hot money and stable funds.
