Fundsupermart.com, the online division of iFAST Financial India Private Limited, held its flagship seminar for retail investors, “What and Where to Invest in 2012”, with free admission to the general public.  The purpose of this investor awareness event was to allow the Fund Managers, Industry Experts and Fundsupermart.com to bridge the gap between the mutual fund industry and retail investors and have the experts address investors’ queries directly.

At the seminar, General Manager of Fundsupermart.com India, Mr Nelson D’souza, spoke about the current uncertainty in the market which perhaps shrouds the long-term prospects of investing in the Indian growth story. He remarked, “The best opportunities for investors never look too obvious and are generally cloaked in negativity. For example, the 2008 drop in Sensex to 8000 levels; very few people looked at that as an opportunity, and the few who did buy, entered the markets at price levels that will probably never be achieved again.” 

Since the global meltdown of 2008, the markets have been in turmoil and consequently, investors have experienced much volatility. Thereafter, in 2009, the markets rebounded with stupendous returns to those who remained invested. In 2010, India witnessed huge foreign flows as the focus shifted to the emerging world which was followed by marked volatility and uncertainty in 2011. Fast Forward 2012: At this stage with the markets correcting and investor nervousness resonating, most of us are perplexed with multiple investment queries. With this in mind, Fundsupermart.com, online mutual fund investment platform, organized the theme for this year’s ‘What and Where to Invest 2012’ wherein, experts from the mutual fund industry shared their views and fore­casts for 2012 (See Annexure A).  

Dr. Renu Pothen, Research Head, Fundsupermart.com India, presented first, talking about the Indian market context and what investors’ strategy should be in the current circumstances.

• Speaking of equity investments she said, “We are of the view that equities as an asset class looks promising from the long term perspective; however, this asset class will be in a volatile phase in the short term. In this context, investors need to enter the market at every dip and also continue with their SIP investments, without being worried about short-term fluctuations.”

• Sharing her outlook on fixed income products for 2012 she said, “RBI will start loosening its monetary policy once inflation shows a moderating tendency and the fiscal situation improves. In the current scenario, we advise investors to continue to look at short-term funds and can also start taking exposure in long-term debt categories.” She ended her presentation by releasing Fundsupermart.com’s list of Recommended Funds across all mutual fund categories.
  

The second session was Equity Investing in Volatile Markets and was presented by Mr Himanshu Pandya, Vice president, Head - Product Development and Delivery, ICICI Prudential Mutual Fund.

• Mr. Pandya shared that volatility is an inevitable part of equity markets. Thus, rather than avoiding the equity asset class entirely, retail investors should use asset allocation strategies to protect their downside. Moreover, equity continues to remain the only asset class with potential to provide inflation-adjusted long-term returns.

Giving her perspective on Fixed Income Funds versus Fixed Deposits for the conservative investors, Ms Lakshmi Iyer, Senior Vice President, Head - Fixed Income and Products, Kotak Mutual Fund explained the tax advantage and returns potential from fixed income mutual funds.

• Despite the obvious advantages of fixed income funds, they account for only Rs. 611,402 crores of assets as compared to Rs. 6,195,600 crores in fixed deposits, which is almost ten times the size of mutual funds.  Guaranteed returns, low or no perceived risk, peace of mind and lack of awareness are some of the reasons which make fixed deposits the obvious choice of retail consumer base. Having said this, Ms. Iyer pointed out in her presentation that investors should consider long-term bond funds and gilt funds with a horizon of 1 year and above during a falling interest rate scenario; whereas, during a rising interest rate scenario, investors should consider accrual products such as FMP.

The fourth session focused on equities again.

• Presenting on the opportunities that exist in the domestic market, Mr. Amish Munshi, Senior Fund Manager, Tata Mutual Fund said, “Last year’s trade of Emerging Markets to Developed Markets is likely to be reversed in the current calendar year.  Most emerging markets have outperformed since the beginning of 2012. Looking at current valuations, we believe that India will continue to remain an attractive investment destination for long-term equity investors in the backdrop of global economic growth slowing down”. 

Mr. Pankaj Sharma, Executive Vice President at DSP BlackRock Mutual Fund shed light on the investment opportunities that exist globally.

• “While we have seen robust growth in India’s GDP, there are other countries also that have shown strong economic growth. By ignoring investment prospects outside India, investors may miss out on market opportunities elsewhere in the world, including some businesses and sub-sectors that may not exist domestically.”  

• Mr. Sharma shared interesting insights on performance of different geographies and a globally diversified portfolio has the potential to deliver higher risk-adjusted returns in the long-run. He explained how Indian investors and their financial advisors can increase exposure to international funds which can help enhance returns while, simultaneously reducing risk through diversification.

Fundsupermart.com’s Dr Renu Pothen is positive on China from a 3-year perspective and believes that the market will see a strong rally as corporate earnings are expected to reach all time highs by 2013.

Annexure A

The speakers for the seminar are:

• Mutual Funds in 2012 - Dr Renu Pothen, Research Head, Fundsupermart.com India

• Mutual funds overcome volatility! - Mr Himanshu Pandya, Vice president, Head - Product Development and Delivery, ICICI Prudential Mutual Fund

• Are fixed income funds better than fixed deposits? - Ms Lakshmi Iyer, Senior Vice President, Head - Fixed Income and Products, Kotak Mutual Fund

• Equity Funds in 2012: Diversification edge - Mr Amish Munshi, Senior Fund Manager, Tata Mutual Fund

• Indian Investors: Way Forward in 2012 - Mr Pankaj Sharma, Executive Vice President, DSP BlackRock Mutual Fund

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