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An investor stands to gain by investing in equity markets through mutual funds. This is because we are currently living in a slow growth and more volatile world market environment. In this situation, professionally managed, well-diversified portfolios offer better solutions to investors, says Gopal Agrawal, Chief Investment Officer, Mirae Asset Global Investments, in an interview to BusinessLine .
Excerpts:
What impact will the Supreme Court coal allocation verdict have on Indian stock markets?
This is certainly a negative development for the existing miners as they need to pay additional royalty of ₹295/mt since start of production to date. The severity of impact can be ascertained only after measures are taken by the Centre to reallocate the cancelled mines. It will have a bearing on asset owners, lenders, power plant suppliers and various contractors.
After the verdict, stock markets started correcting. Do you think this is a buy-on-dips time? Why?
The prevalent trend is a buy-on-dips time as the macro of our country has significantly improved and growth has bottomed. The market is trading at close to long-term average valuation matrices.
Are you saying it is structurally a bull market...
The sustainable revival in GDP growth will make this rally stronger and sustainable.
Which sectors will do very well going forward?
The market is likely to remain stock-specific. However, till the investment cycles kick-starts, it is expected that exports and consumption-related themes will do well. Generally, in a slow growth period, market reacts more favourably to predictable cash flows, as well as competitive and sustainable business models.
If it is going to be a broad-based market rally, don’t you think retail investors will be better off investing directly? Why should he/she opt for MFs?
Mutual fund is a hyper-competitive, transparent, well-regulated and among the lowest cost models to have exposure to capital markets. We are living in a slow growth and more volatile world market environment. In this situation, professionally managed well-diversified portfolio offers better solutions to investors.
Mirae has two China-focussed schemes. Did Mirae participate in the Alibaba public issue?
No comments on Alibaba, but we are overweight on the e-commerce sector in the portfolio.
Where do you see potential (industry and sectors) for the make-in-India campaign?
It will have positive impact across major sectors of the economy with boost to employment generation, GDP growth and for reduction in CAD.
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