Business Daily from THE HINDU group of publications
Tuesday, Sep 05, 2006
Business Daily from THE HINDU group of publications Tuesday, Sep 05, 2006 |
|
|
|
|
|
|
|
Markets
-
Interview Nilanjan Dey
MR I.V. SUBRAMANIAM
Kolkata , Sept. 4 Quantum MF, about the youngest player in the asset management space, is aware that the indices have been lately rising despite the poor liquidity that hinders certain segments of the market. Mr I.V. Subramaniam, Senior Fund Manager and Head of Research, dwells on a host of issues, including the fund's recent strategy to gradually scale up exposure to certain stocks. He also refers to the direct-to-investor approach taken by Quantum MF, bypassing the current system of distribution. The equity market, after the mid-May decline, is lately not showing any signs of fatigue. What conclusions can you draw from this? Foreign investors were net buyers during the June-August period. Domestic mutual funds, which had been net buyers in August, were net sellers in June and July. A pause in US rates seems to have helped the continued flow of foreign money. We think global liquidity is still high and this continues to help in keeping asset prices buoyant. However, unlike 2005, pricing of risk will be far more rational now and we may not see the type of money flows into India as we saw last year. Further increases in global interest rates and their adverse impact on money flows cannot be ruled out. On a normalised basis, we expect the US rates to be in the region of 5-5.25 per cent. Aren't many mid-caps still constrained by a lack of liquidity? Liquidity in the market has reduced and is particularly low for many mid-cap stocks. In the case of BSE 500, volumes during January-May had gradually increased and were very good from mid-March to mid-May. Since the mid-May decline, volumes have reduced and were considerably lower in June and July. Although this has picked up in August, it is still below the March to May level. What sort of changes, if any, have you brought about in recent times in your fund? We have exposure to all sectors except consumer staples, some segments of industrials (such as engineering) and some segments of materials (such as building materials). In the sectors where we do not have exposure our worry is mainly with valuations and not so much with the potential of these businesses. Our top five holdings are Bajaj, SBI, ONGC, Ranbaxy and Infosys. We have not made any significant changes to the portfolio in recent times. However, there has been a gradual increase in exposure to certain stocks. How is your distribution strategy unfolding? What can change the market's opinion on distribution? Quantum MF has adopted a unique model of reaching out to investors directly without any distributors. This has been adopted solely for the benefit of investors. Because no sales commissions are paid, more of the investor's money is put to work. By and large, investors are ignorant about the fact that distribution costs eat into the amount invested. Communicating this and educating the investing population is a time-consuming and uphill task. But people are getting increasingly aware of the benefits of a direct-to-investor approach. We use various communication channels to demonstrate the low-cost approach to investing in a mutual fund and the resultant advantages to the investors.
More Stories on : Interview | Mutual Funds
Article E-Mail :: Comment :: Syndication :: Printer Friendly Page
|
Stories in this Section |
|
The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription Group Sites: The Hindu | Business Line | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |
Copyright © 2006, The
Hindu Business Line. Republication or redissemination of the contents of
this screen are expressly prohibited without the written consent of
The Hindu Business Line
|