Nimesh Shah, MD & CEO, ICICI Prudential Mutual Fund, on how they have beheld investors' confidence over the years.
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NewsTranscript
00:00 Again, when the markets go up 30% and if you go up 28% he is not bothered about that.
00:18 He is more bothered when the market falls 12% and you fall much lesser than the market.
00:24 Because the pain, there is a lot of research on this in US, the pain of losing 5 rupees
00:33 is more than the joy that they gain in earning 30 rupees.
00:38 That's the research.
00:41 So create relatively, you cannot avoid pain, in investments pain will always be there.
00:47 But can we create defensive products?
00:50 Can we create products which limit the downside?
00:54 So our continuous endeavour is how do we run away from risk at any rate.
00:58 So I have got more defensive products.
01:00 In the last 3 years if you see us, since we used to aggressively sell equity products
01:06 in 2014, in 2013 before the government came into power, when in 2013 we were gone on the
01:12 front foot in October 2013 creating a lot of NFOs, value 1, value 2, value 3, value
01:17 4.
01:18 We wanted them to put in equity big time because the markets were very very fairly
01:22 less than fairly valued.
01:24 But once the markets ran away, after Mr. Modi came into power and the markets really ran
01:29 away, we have been continuously telling people to put in defensive products.
01:33 Products which have got a limited downside, products which work in volatility.
01:37 We created a product called ICC, Prudential Balance Advantage Fund.
01:40 What does that product do?
01:42 When the markets become expensive it sells off equity and goes into debt.
01:46 And when the market becomes cheap again it oscillates between 80% equity and 30% equity
01:51 depending on the levels of the market.
01:52 If the market price to book ratio is high it will get into debt.
01:56 If the market price to book ratio is low it gets into equity.
01:59 So customer does not have to do anything.
02:01 So whether the markets are at 29,000 or 21,000, the customer should put money in balance advantage.
02:06 We will keep on doing the asset allocation between equity and debt.
02:10 So that compulsory booking of profits when the market goes up and buying more when the
02:14 market goes down is automatically done by the fund because the customer does the other
02:18 way round.
02:19 He comes into the market when the markets actually become expensive.
02:22 So that behavior will continue.
02:23 So products like ICC, Prudential Balance Advantage Fund will ensure that the customer is protected
02:28 and for me the brand is protected.
02:30 [Music]