The Hindu Business Line : `We advise investors to stay prepared for sudden movements'

Sahara MF, which has about Rs 600 crore under management, remains among the smallest players in the asset management space. But that will not stop it from innovating, claims Mr Naresh Kumar Garg, CIO.

Here he shares his views on the market, especially on the challenge that current valuations throw up.

Excerpts:

Do you still find value in this rapidly-advancing market?

The trick, as always, is to choose stocks that hold promise. As the market moves ahead, it usually becomes progressively difficult to locate value. Having said that let me tell you that fund managers like us must always try to overcome this basic challenge. It is important to hold the conviction that stock picking will give you the desired results, at least from a medium- to long-term perspective, high chances of volatility notwithstanding.

Isn't the road ahead full of uncertainties?

Yes, that may well be the case. In fact, we advise investors to stay prepared for sudden movements. Some sections may try to utilise the uncertainties by timing their entry and exit. This trend leads to its very own set of risks.

As the common saying goes, it is `time in' the market and not `timing' the market that is important.

Which are the sectors that look most promising?

Let me answer this question by reiterating that there is evidence of growth in so many areas. A number of businesses seem to be doing particularly well, having gained from reforms, greater spending and higher demand.

And the ones that are better than their peers in well-defined ways should find their way into professionally-managed portfolios.

Your latest product is actually quite broad-based...

True. Our assessment tells us that the newly-mooted infrastructure fund should cover a number of major segments. As we see it, `infrastructure' goes beyond steel, cement and energy. It also involves banking, healthcare and communication.

Now, this makes up a large universe, one that accounts for a good portion of the total market capitalisation. The fund will have a diversified portfolio. This too will come with fixed and variable pricing options.

Does this come with a dual fee structure?

Yes, there will be fixed and variable pricing options.

Under the latter, the fees for the asset management company will be determined by the fund's performance. As you know, we had started this practice earlier and would like to nurture it in the days ahead. We believe this will be a good idea for investors.

Any new products in the pipeline?

We have approached SEBI with what has been named as Sahara R.E.A.L. Fund. This is an acronym for Retailing - Emerging And Leaders.

The scheme will try to invest chiefly in companies that have marked retail activities across various sectors. We will examine the possibility of its introduction when conditions are right.

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