MUTUAL FUNDS

It would be important for the government to signal how it intends to boost the economy without compromising on fiscal consolidation<
08-Feb-16   15:47 Hrs IST

Mr. Rupesh Patel
In an interview with Anjali Raulgaonkar from Capital Market Publishers, Rupesh Patel, Fund Manager, Tata Mutual Fund said, We are at the cusp of recovery in corporate earnings and market returns would be reflective of the same.

Excerpts:

  1. Kindly throw some light on Tata India Tax Savings Fund. How is the fund beneficial in the current market scenario?
  2. Tata India Tax Savings Fund is an open ended diversified equity fund with regulatory lock-in for 3 years. The fund invests with no market cap bias and follows a bottom up approach to stock picking. The objective is to generally buy businesses which have compounding characteristics, strong growth potential, good capital efficiency and are run by competent management teams. At the same time fund does not shy away from taking opportunistic exposure to special situations arising out of market, industry or stock specific developments.

    For a fund like Tata India Tax Savings Fund, which follows bottom up approach to stock picking, current volatile market scenario provides good opportunities to buy quality businesses at reasonable valuation.

  3. How frequently you alter the portfolio of the scheme?
  4. We believe that investment success comes by investing in quality businesses at right valuations and remaining invested in them as the business scales up. Hence, as long as the investment argument for remaining invested in a stock remains valid and valuation is reasonable, we prefer to remain invested in the company. The decision to sell is triggered when the initial investment argument goes wrong, valuations become uncomfortable or there is a better opportunity available where the risk reward is relatively more favorable.

  5. What are your expectations from Union Budget 2016-17 in general and for mutual fund industry in particular?
  6. In general, our expectations from budget is that it should be pro-growth and encourage investments in the economy. As we know the investment cycle is still very weak and private sector capex is not forthcoming, it would be important for the government to signal how it intends to boost the economy without compromising on fiscal consolidation.

  7. What is advice to investors investing in Mutual funds?

Equity is a volatile asset class, however, to benefit from the same, one has to remain invested through the volatile phases. We believe, we are at the cusp of recovery in corporate earnings and market returns would be reflective of the same. Hence, investors should not get too much worried about near term news flow and remain invested. Further, investors should take benefit of any near term corrections to increase their allocations to equity.

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