Long-term wealth generation a challenge: Ajit Menon, CEO, PGIM India Mutual Fund

The perception is that balanced advantage funds are more to beat volatility than to create long-term wealth. What is your view on the same?
We are currently launching our Balanced Advantage Fund. Trends so far have been that retail investors tend to invest when markets are growing and expensive and redeem or avoid markets when they are correcting and cheaper. Investors also unfortunately don’t seem to have very long investment time frames in India. One way to look at it is that if one doesn’t beat short term volatility then long term wealth creation will be a challenge anyway. Compounding is what creates wealth and one has to ensure that they are protecting their downsides much better and participating better in the upsides. That’s what products like balanced advantage do. It helps one beat inflation over medium to long term, it is not about maximising returns. If one does that then the wealth creation journey will be much smoother for investors rather than having great euphoria and disappointments in between

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