Category
🗞
NewsTranscript
00:00 (upbeat music)
00:02 - Welcome, you're watching the Mutual Fund Show.
00:10 I'm Tamannah Anamdar.
00:11 Now the buzz is all about exit polls, election results,
00:15 and of course, the kind of response we have seen
00:18 from the markets to the exit polls.
00:21 Suffice to say, a lot of portfolios
00:24 and mutual fund investments looking very healthy today.
00:28 The question is that even as every retail investor,
00:31 fund manager is trying to understand
00:34 what next in the market,
00:36 what does that advice say for mutual fund holders?
00:40 And that's what we're trying to break up today.
00:42 So we've done a couple of things.
00:43 We've tried to tell you what have been
00:45 the best performing funds in the last five years.
00:49 And remember, post-election, so on the 5th of June,
00:53 we'll have a very special mutual fund episode as well,
00:57 talking about what the next five years of your portfolio
01:00 and investments should look like.
01:02 Now to speak more on the topic today,
01:04 we're joined by Rushabh Desai,
01:06 founder of Rupee with Rushabh Investment Services
01:09 and Santosh Joseph,
01:10 founder of Germinate Investor Services.
01:12 Welcome to both of you.
01:13 And thank you so much for speaking with us today
01:16 on the show.
01:16 I was quite excited about this topic, Rushabh,
01:18 and I'll come to you first,
01:20 because looking at things in that time block,
01:24 if I were to look at just the mutual fund industry
01:27 and the kind of penetration of mutual fund investments
01:31 over the last five years,
01:32 if I were to look at 2019 and 2024,
01:35 there is a huge jump in the number of investors
01:39 who have now put their faith in mutual fund,
01:40 the number of AUMs, the amount of AUMs,
01:43 SIPs which have come in, folios which have been opened.
01:46 So today this becomes a very pertinent question,
01:49 that what is the election play?
01:52 - Tamala, first of all,
01:53 thanks so much for having me on the show.
01:55 See, we are absolutely living in very unprecedented times,
01:58 very exciting times.
02:00 And of course, as you correctly mentioned,
02:02 that exit polls have clearly given
02:04 a clear indication towards the BJP led India government,
02:09 turning out to be a full majority for the third term.
02:13 See, this clearly indicates
02:15 that there is going to be strong economic growth,
02:18 reforms are going to be made,
02:20 the reforms are going to be made
02:22 with absolute strength and precision.
02:26 And of course, policy momentum is going to also continue
02:29 as the way it is.
02:30 So this is going to be focused on three things.
02:33 One is the capital expenditure,
02:35 manufacturing and infradevelopment.
02:37 As you correctly put that over the past five years,
02:40 that yes, mutual fund has grown substantially,
02:45 the penetration and the equity also has grown quite a lot.
02:49 But let's not forget out of 140 crore population,
02:52 we still remain very much under penetrated Tamana.
02:55 See, we are not even 10% penetration
02:58 in terms of mutual funds,
02:59 and we are not even 10% penetration
03:01 in terms of in penetration in equity, right?
03:04 Although we have seen a good jump,
03:07 there has been around 55 lakh crore of AUM
03:09 in the mutual fund industry
03:10 and 20,000 crore of monthly SIP
03:14 is flowing into the mutual fund industry.
03:16 But I feel we have a very, very long way
03:19 to go, this is just the beginning.
03:21 But this, in today what just we witnessed in the market
03:25 is more of a sentimental driven spike what we saw.
03:30 Let's not forget the fact that valuation
03:33 still remain very expensive today.
03:35 Mid and small caps are definitely very expensive
03:37 compared to large cap.
03:39 Large caps remain comparatively reasonably priced today.
03:43 So I think we have a very long way to go,
03:45 but investors should not get carried away
03:47 by the sentimental spikes.
03:49 - No, no, that's fine.
03:50 Investors should definitely not get carried away
03:52 by the sentiment.
03:53 I mean, but the fact is that people have found a way
03:58 to increase value.
03:59 And we were just showing
04:00 some of the best performing funds
04:02 in the small and mid cap segments.
04:05 You have seen funds give returns
04:08 of over 300% in the last five years.
04:10 Now assuming that you stayed put in them.
04:12 So wealth has been created.
04:15 The question is, even when you're talking
04:18 about valuations, Rishabh,
04:20 those who are continuing with their SIPs
04:22 have been in for a while, are consistently coming in.
04:26 What about investors who are now looking
04:28 at larger allocations perhaps into mutual funds?
04:31 What would be your advice for them?
04:33 - Ataman, people who are looking to invest lump sum today,
04:38 definitely they should not venture into mid and small caps.
04:40 Mid and small caps should be avoided at all times
04:44 at this point of time.
04:46 I see value in three and four, three, four pockets, Ataman.
04:50 One is the large cap segment where valuations
04:52 are comparatively reasonably priced
04:55 versus mid and small caps.
04:57 Second is I see immense opportunity in growth strategy
05:02 because growth strategy is underperformed
05:05 over the past three years.
05:06 Over the past three years,
05:07 value as a strategy gave phenomenal returns.
05:10 So I see value in growth oriented products.
05:13 Third is I see opportunity in hybrid products,
05:17 which is the dynamic asset allocation funds,
05:19 which is a combination of equity and debt both.
05:22 And I pulled out the portfolios
05:25 of the dynamic asset allocation funds,
05:27 which stand at around the equity side,
05:29 stand at around 75% large caps, right?
05:32 And the debt yields at the peak range.
05:35 I think dynamic asset allocation funds
05:37 are today in a very sweet spot.
05:38 So one is pure large cap.
05:42 Second is growth oriented products.
05:44 And third is dynamic asset allocation funds.
05:46 These are the three categories I see immense
05:49 upside opportunity in the next two to three years.
05:53 - Okay, so there are still major upsides
05:57 in the next few years.
05:58 Santosh Joseph is joining in.
06:00 Santosh, I think one question
06:02 that a lot of people would have is,
06:04 is this the time to sort of front load
06:07 and make in some lump sum investments,
06:10 or should we wait till all of this frenzy
06:13 and excitement about election results dies down?
06:16 If you have these cash allocations to make,
06:18 of course, those who are already in SIPs,
06:21 I assume your advice would be to continue as is.
06:24 - Hi, Tamanna.
06:26 So yes, the guys who are on the sidelines
06:29 or missed out participating so far,
06:33 it's a great opportunity for them
06:34 to enter the markets even now.
06:37 Now, though today's an exciting day,
06:39 Monday's become a green day with so much of positive
06:42 and upsides in the market already visible
06:46 just by the exit polls,
06:47 and we still have the election outcome to come.
06:49 But for the people who are waiting for this big event
06:52 to get over or get done with,
06:54 today have a clear indication for another five years.
06:57 So therefore, this 2%, 3% that's just moved up now,
07:01 or the last 20, 30% in the last year or so
07:03 should not be a deterrent saying
07:04 that they came late to the party.
07:06 Even today, if you're an investor
07:09 who was considering to invest,
07:10 there's ample upside, plenty of opportunities,
07:14 plenty of pockets of spots that you can invest
07:17 in the markets even today to begin your journey.
07:20 Now, for the people who've been sticking to their investments
07:23 or being investing for the last one or two years,
07:25 it is a great validation that they did right
07:28 by one, investing, number two, not pulling out,
07:31 number three, continuing to invest through SIPs.
07:34 I think all of them would be vindicated
07:35 and there's a good pat on their back.
07:38 But for the people who missed out the whole story,
07:41 you have a great opportunity even now to begin
07:44 because you still have,
07:46 the whole purpose of the election was to bring clarity
07:49 and a long runway in place for you.
07:51 So now the runway is in place,
07:52 the big event is kind of done with right now.
07:55 I think there is enough headroom,
07:57 even if you're starting today,
07:58 to make money and make money in a meaningful sense.
08:01 - Where are those pockets, Santosh?
08:03 Because then that's the next interesting question.
08:07 If I just look simply at the kind of moves we've seen
08:11 and there's a broad brush sort of up move in the markets,
08:16 but PSUs, defense, infra,
08:20 and we've seen these thematic funds also do very well
08:23 in terms of interest of investors
08:26 in the last couple of years.
08:28 Would you double down on these kinds of themes?
08:30 Small, mid, large, what would be your best bet?
08:35 - So you're right in the last year and a half,
08:39 a lot of thematics have done phenomenally well
08:41 in mid and small cap,
08:41 everyone knows the story that it's done great returns
08:44 for the investors.
08:45 But I think now I'd be a little boring with my approach
08:48 to say that rather than pin down on large, mid or small,
08:51 I'll go with all the three.
08:52 My first choice in this category would be the multi-cap.
08:55 I feel that in this given context,
08:58 it is the most underrated category
09:01 in the whole mutual fund space,
09:03 which is the multi-cap,
09:04 where you have a good combination of almost 40, 50%
09:07 in large cap and a nice balance of mid and small cap.
09:10 Now, one cannot ignore in such a structurally bullish
09:14 economy like India to say that smaller mid caps,
09:17 I will not stay because the valuations are high,
09:19 because these high valuations can even become greater.
09:21 But if you get into a multi-cap
09:24 and if you want to be a little more conservative,
09:26 get into a flexi-cap,
09:27 there's huge opportunity there to play the large caps,
09:32 which are available at good valuations,
09:34 mid and small caps selectively have a portion
09:36 in your portfolio,
09:37 selectively nibble some of the best names,
09:39 which still have a massive upside pending in them.
09:42 So I think multi-caps is my first go-to,
09:45 flexi-cap with a little more generic exposure,
09:48 higher to large cap,
09:50 still makes a lot of sense.
09:52 I will not stay away from the market,
09:53 but I'll also be slightly less receptive
09:57 towards any thematic or standalone large cap or mid cap.
10:00 - You know, I'm going to ask both of you for your top funds,
10:03 because that's,
10:05 investors will want a clear takeaway today
10:08 on what to look at now,
10:09 whether they're SIPs, lump sums, et cetera.
10:11 If someone is coming in with a fresh allocation right now,
10:14 Rishabh, what would that breakup look like
10:16 and what would be your top funds?
10:18 - Tamanna, I think any portfolio,
10:23 while creating any portfolio,
10:24 one should stick with their goal,
10:26 their risk appetite, time horizon,
10:27 and asset allocation, right?
10:29 But if you ask me,
10:31 if I have a long-term time horizon,
10:33 say of say 10 years or so,
10:35 and someone is venturing into the equity segment,
10:39 I think around 50, 60%,
10:41 I would put my money in the flexi-cap category,
10:44 20, 25% into pure mid caps
10:47 and 20, 25% into pure small caps.
10:49 I think that will be a good combination
10:51 because we have observed that, you know,
10:53 flexi-caps have always been a little more tilted
10:55 towards the large caps.
10:56 So in this way, see if you create a 50, 60 portfolio
10:59 or towards the flexi-cap,
11:01 you are automatically getting anywhere between 40 to 50%
11:05 into large caps, right?
11:07 So I think 50, 60 towards large caps
11:10 and the rest can be divided into mid and small caps
11:12 is something what I would create for myself.
11:16 - What about debt?
11:17 Debt funds, would you be looking at them now
11:19 in new light, Rishabh?
11:21 - Tamanna, I think this is a very golden period
11:25 for the debt market because now, you know,
11:28 interest rates are definitely at India peak range,
11:30 but also India has come under the JP Morgan bond index
11:35 and the Bloomberg emerging bond index, right?
11:38 So over the next two to three years,
11:40 20 to $40 billion will be pumped into the bond market.
11:43 So I think I would go towards the corporate bond funds
11:48 and tactical allocation towards G-Sec.
11:51 This is something what I would create in the debt segment.
11:54 - Santosh, that question to you.
11:57 Let me add, what would be the equity debt split right now
12:01 and what would be your top fund picks?
12:03 - Okay, let's go the other way.
12:05 So first and foremost, good question.
12:07 We always still need to have a debt and equity mix
12:10 because it's very common for investors to think
12:14 in very buoyant markets like this,
12:16 that they don't need debt.
12:17 And especially when you look at the last year or two
12:20 where equities have massively outperformed
12:22 and fixed income being very benign,
12:24 one would think that they could skip debt altogether.
12:27 But I think the question itself is well placed
12:29 that you need debt into the portfolio.
12:31 And within debt, I would play it as a combination
12:33 of that three-year average maturity
12:36 with a decent holding of maybe corporate bonds
12:40 and a mix of both corporate and government bonds.
12:44 Clearly the biggest upside is there in the government bonds
12:48 when you play the five to seven-year modified duration.
12:50 I think you're getting the best of both worlds.
12:53 In fact, like Rishabh said, there are many levers
12:56 even for a positive fixed income yield benefit
13:00 for the investors in the next one or two years.
13:02 So while you are pushing your portfolio
13:05 with some amount of fixed income, maybe 20, 30%,
13:08 or maybe up to 40% for a conservative investor,
13:11 there is now a situation in place where fixed income
13:14 will give you better than what it did in the last two
13:16 or maybe even three years.
13:18 There is an opportunity there.
13:19 And even the quality of fixed income,
13:20 you don't have to go down the order
13:22 between good corporate bonds and GCEX.
13:24 There's enough of money to be made.
13:25 Now, coming back to equities.
13:27 Now, I think my favorite would still be the multi-cap
13:29 simply because by definition,
13:31 a multi-cap should have a minimum of 25% in large cap,
13:35 mid cap, and small cap.
13:36 And therefore, the rationalization will happen
13:38 in about 40, 50% in large cap and rest in mid and small.
13:42 It gives you a beautiful opportunity
13:43 to play this massive opportunity
13:46 as India's economy blooms from a global perspective.
13:50 Now, coming back to what are the funds that we like,
13:52 I think traditionally multi-cap and flexi-cap funds
13:55 are easy to select because if you select the ones
13:57 which have a one or two year track record
13:59 and even a reasonable size of fund from a good fund house,
14:02 you have the winners over there.
14:04 My, you know, I have favorites of flexi-cap with,
14:08 you know, on the multi-cap side,
14:10 I like the Nippon multi-cap.
14:12 On the flexi-cap side, I like the 361 flexi-cap.
14:14 I also like the HDFC flexi-cap, I tried and tested.
14:18 And on the balanced advantage, you know,
14:20 guys like HDFC and ICICI have got a phenomenal track record
14:24 and even their equity ratios right now
14:27 give you a straightaway fix into debt and equity,
14:30 large cap and mid cap, small cap, all fixed.
14:32 So depending on what kind of investors listening to us,
14:35 if you choose a BAF, you've got debt, you've got equity,
14:38 you've got large cap, you've got mid cap fixed.
14:39 But if you wanna bring your portfolio alone,
14:42 then you normally do a 60, 70 in equity
14:44 and then we'll balance this to fixed income.
14:46 - This is the part of the show where we take your queries.
14:49 So let's start with those.
14:52 Now, the first query is from Gopal
14:54 who wants to know about his retirement fund.
14:57 He is 47 years old and says,
14:59 "I want to add a mid and small cap fund to my portfolio
15:02 and invest 20,000 rupees in the funds.
15:06 Can you recommend a few schemes?"
15:08 He's also given details of his current investments via SIP,
15:11 which includes the PPFAS, flexi-cap fund, Franklin India,
15:16 flexi-cap and Kotak large and mid cap.
15:19 So Rishabh, already two flexi-caps are there,
15:22 large and mid cap.
15:22 I would say a well spread out kind of a portfolio.
15:26 Now, where should the additional 20,000 rupees go?
15:30 He's identified small cap funds,
15:32 mid and small cap funds as the target.
15:34 - Tamanna, first of all, the portfolio looks very good.
15:40 Fund selection is great.
15:42 Portfolio is of course more tilted towards large caps.
15:45 So I think don't add too many funds in the portfolio.
15:49 I would just add one additional fund,
15:51 which is the Mirai Asset Nifty,
15:54 mid and small cap 400 momentum quality 100 fund of fund,
15:57 which is a combination of both mid and small cap.
16:00 I think one passive fund, one smart beta fund,
16:03 and from the data, what we saw, it looks quite nice.
16:08 I think adding just one fund,
16:11 which is a mid and small cap 400 momentum index fund
16:14 would do the job.
16:15 Don't add too many funds.
16:16 I think he'll be very well sorted.
16:19 - The additional 20,000 rupees all goes in this one fund
16:22 that you've mentioned?
16:24 - Absolutely.
16:25 - Okay.
16:26 Santosh, what is your advice?
16:27 Santosh, can you hear me?
16:32 Okay, we seem to have lost the feed with him.
16:36 We'll try and get him back on.
16:37 Srivardhan Reddy has the next query for us.
16:40 He's 25 years old and his goal is retirement fund.
16:43 Good on you.
16:44 First of all, Srivardhan,
16:45 to think about your retirement fund at age 25.
16:49 He has an investment period of 20 plus years,
16:52 of course, with time on his side,
16:53 and a salary of 40,000 rupees per month.
16:56 He asks if he has chosen the right schemes
16:59 and has talked about all of those schemes.
17:01 There's an SBI multi-cap fund, regular growth,
17:03 Kotak equity opportunities fund,
17:06 Franklin India FlexiCap fund as well.
17:08 All of them are growth schemes.
17:10 First of all, Rishabh, I mean, kudos to our viewer
17:14 who is thinking already about retirement fund
17:17 and investments right at the get-go.
17:20 Says he wants to add more
17:24 and is asking for a review of the schemes
17:26 that have been invested in so far.
17:28 - Atamana, absolutely.
17:31 First of all, congratulations to him.
17:33 That 25 years, he's thinking about retirement,
17:35 which is around 60, 65 years of age.
17:39 All of the funds are very good in quality,
17:42 backed by great AMCs and teams and fund managers.
17:46 I don't see any issue with it.
17:48 You can hold on to these funds the exact way it is.
17:53 Just one small recommendation is add
17:56 a Nippon India multi-cap fund
17:59 from a diversification point of view.
18:01 I think including Nippon India multi-cap
18:06 will have a good balance between large, mid, and small caps.
18:09 I think having little more tilt
18:11 towards mid and small cap is very important
18:14 as per his age, because historically,
18:17 we have seen that mid and small caps
18:18 have always given higher returns compared to large caps.
18:22 So I think adding Nippon India multi-cap fund
18:25 would do the job.
18:26 And just one more thing that,
18:28 as and when your salary increases,
18:31 don't forget to step up your SIP amount by 10 to 20%.
18:36 I think a substantial amount of wealth
18:38 will be created over the next 30, 40 years.
18:42 - Santosh, we've got you back on the line
18:44 and I wanted you to field this query
18:47 from our 25-year-old viewer
18:49 who's looking at a retirement fund.
18:51 He's named his funds, there are three of them,
18:54 and wants a review, whether this is the right choice.
18:57 - No, no, absolutely the right choice.
19:00 And I agree with Rishabh that it's great
19:02 that at this age, he's taken it upon himself to invest
19:05 and got a good mix of funds to go with.
19:07 And this is probably the ideal set at that age to begin with
19:10 and I'd again concur with Rishabh to say that
19:13 at this age, this salary, this SIP is just the perfect mix.
19:17 As you progress in your career,
19:19 your salary is gonna grow and keep the investment in line
19:23 with the growth of your salary
19:24 so that you start making this entire wealth building exercise
19:28 more meaningful.
19:29 Now, I would go on to say that as your salary increases,
19:33 you can also increase a little bit of your risk appetite
19:36 by adding maybe one or two SIPs into mid-cap and small cap.
19:40 And even after that, as your salary progresses,
19:42 to add a little bit of international exposure
19:44 because you've got a long runway and if you're 25
19:47 and I'm suggesting that you have 20, 30,
19:49 or maybe even 40-year career,
19:50 you'll add more money to the investments.
19:53 You don't need to necessarily add more funds,
19:55 but you can rationalize the number of funds,
19:57 but stick to it.
19:58 Don't pull out money when you have the first need,
20:01 you'll do well.
20:02 - Yeah, I think that's the big one.
20:04 Stick to it and don't pull out money
20:06 when you have the first need.
20:09 Ramesh is the next query, 35 years old,
20:12 also wants to build a retirement fund
20:15 and I really found this query interesting.
20:17 He asked, "Should I reduce my exposure to EPF
20:21 and add more to small cap funds?"
20:23 Which is 75% of his portfolio.
20:26 "Until I turn 50 and then move the funds back to large caps.
20:30 Also, access funds are underperforming
20:32 against the category.
20:33 Should I stay invested or move to another fund?"
20:36 He's also added his list of investments,
20:39 which includes the Axis Blue Chip, Mid Cap,
20:41 all of them actually, Axis Small.
20:43 So three Axis funds, then there's PPFAS,
20:45 Flexi, Mirai, as well, and his EPF fund as well.
20:50 So the basic question, Rishabh,
20:52 and then we'll come to the second part, of course.
20:54 The basic question is that,
20:56 should he reduce his exposure to EPF
20:59 and add more to the small cap fund category?
21:02 - Saman, what I understand from the question is that,
21:06 he's investing 11,000 rupees per month in the PF product.
21:11 I think continue the way it is.
21:15 Maybe if he doesn't want to step up, that's fine.
21:19 I would not recommend going beyond 1,50,000
21:23 per financial year, which helps give tax benefits
21:28 in the PF when you retire.
21:32 So don't go overboard in PF,
21:34 but have a sufficient PF of 1,50,000 rupees
21:37 per financial year.
21:38 This is something what I would recommend.
21:41 Coming to his portfolio is, too many Axis funds.
21:45 It is very important to not have concentration
21:48 rest towards one particular AMC,
21:51 because currently, yes, Axis is underperforming.
21:54 So probably 50% or more than 50% of his portfolio
21:57 would be in underperformance at this point of time.
22:00 Have different funds from different AMCs
22:05 to avoid underperformance and overlap risk.
22:07 I think overall, from category wise,
22:10 he's done a good job, blue chip, mid cap, small cap,
22:13 flexi cap and emerging blue chip.
22:16 I think just keep Axis small cap fund, right?
22:20 And you can switch Axis blue chip
22:22 into another large cap fund and Axis mid cap
22:24 into another AMC mid cap fund.
22:27 I think overall, he'll be very well sorted.
22:30 - Okay, very quickly, Santosh,
22:31 because we're almost out of time.
22:33 Just a basic query, PPF, I assume it's PPF,
22:36 because EPF, you don't really have a choice beyond a point.
22:38 PPF versus a small cap fund
22:40 and then switching that to a large cap fund.
22:43 - No, I think the primary thing that you've got to sort out
22:47 is that ideal mix of debt and equity.
22:49 So I think you should continue the PPF
22:51 because it's important.
22:53 We cannot, in these exuberant times, get carried away.
22:56 One, into overexposure to equity
22:58 and second, also overexposure to small cap.
23:01 It's definitely not recommended.
23:03 I know the times are such that small and mid caps
23:05 have significant outperformance to broader markets
23:08 and therefore there is this affinity to think
23:11 that if I move to small cap, I will reach my goals earlier
23:14 or I'll increase my overall net worth.
23:17 Avoid those kind of knee jerk reactions
23:20 in a buoyant market like this.
23:22 I prefer keeping a combination of both the PF bid
23:25 and even equity bid.
23:26 Continue this portfolio with minor tweaks
23:30 and if you're so aggressive
23:32 or you want more equity exposure,
23:34 increase it in the flexi or the multi-cap category
23:36 like I explained earlier
23:37 so that you get a good exposure to the markets
23:40 and good outperformance to the markets in general.
23:44 - All right, that's all the time we have today
23:46 but Rishabh and Santosh, thank you so much
23:48 for joining us on the show.
23:50 To all our viewers, tomorrow's gonna be a whole day
23:53 of election and markets coverage.
23:55 Don't forget to tune in for that on NDTV Profit
23:58 and we'll be back on the 5th of June
24:01 on the Mutual Fund Show at the same time, same place
24:03 to talk about what the next five years
24:05 of your investment should look like.
24:07 For now, that's a wrap for me
24:10 but stay tuned, a lot more coming up on the other side
24:12 on NDTV Profit.
24:13 (upbeat music)
24:16 (upbeat music)
24:19 (upbeat music)
24:21 (upbeat music)