A post-graduate in management and a CFA charterholder, Lalit Nambiar began his career at a stock broking firm, before moving to the mutual fund business.

He is currently Fund Manager and Head – Research, UTI Mutual Fund. In an interview with Business Line , he shares his views on money, savings and investments.

What does money mean to you and how has it changed over the years?

Money for me is essentially an enabler, with economic goals as stepping stones to larger life goals. It is a means of providing my family with security and stability and creating an environment that nurtures their aspirations. This has been the value system passed onto me by my parents and this view has not changed much today.

It has only become more nuanced over time. A core belief is that one may not always be able to control the amount of money one has, but one can control one's attitude to it.

What was your first investment?

From what I can remember, I think it was in the stock of HDFC Ltd. I bought it for the management quality and the strong business franchise.

It was also the first stock I had helped research as a junior analyst. Unfortunately I did not hold it for long.

What has been your most successful and your most faulty investment till date?

Gold, through UTI Gold ETF. Even after the recent correction, this investment has worked reasonably well for me.

In terms of mistakes, in my early years in the market, I had a few penny stocks which were never heard or seen again. Thankfully the corpus invested was small. I guess burning ones fingers on so called ‘hot stocks’ is almost an initiation rite into the equity markets.

What did you learn from your investment experiences?

The power of compounding, to borrow the words of Albert Einstein, really is one of the wonders of the world. I think successful investing requires patience over a sensible time horizon. It also needs prudence, humility and above all, discipline.

What are your financial goals today and how are you creating the corpus to achieve them?

My wife and I have set goals for my children’s education needs and our family’s health requirements. The rest is for retirement with something set aside for holidays and travel. Our approach is mainly a mix of mutual fund products including equity SIPs, treasury schemes and gold ETF. Apart from that we have some bank FDs, term insurance and medical insurance.

How has your asset allocation changed over the years?

My risk appetite has grown after the recent purchase of a house and since then I have been increasing my allocation to active equity MF schemes through the SIP route. Until then it was predominantly fixed income products with the rest in gold and tax saving equity schemes.

What are your return expectations from your investments? How do you plan your investments to beat inflation?

Active equity mutual funds are a long term bet and I think over a 15-year period, they should provide a CAGR of about 15 per cent, acting as the main bulwark against inflation.

Fixed income mutual funds are a shorter term opportunity and I am trying to play the interest rate cycle, the returns here should be about 10-11 per cent post tax. Gold to me is an insurance against a meltdown in financial markets.

Your message on investing and savings to young people?

One must start at the earliest and save as much as possible. If invested prudently, the power of compounding can reap rich rewards for the early investor, even if the absolute amount invested is small.

> vardhini.c@thehindu.co.in

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