On Mutual fund inflows: The best type of inflow is the SIP and STP and that flow has continued. Five-year SIP is one of the best products to invest in. SIPs have grown significantly over the last few years. The AMC is comfortable even if the quantum of SIPs remains at this kind of level, but it is very important that people do not stop SIPs when the markets are down. SIPs are the best products in the investment market provided you invest when the markets are volatile and not only when the markets are up.
Best Theme to Play: AMC was worried about themes which required high borrowings cost till correction in oil prices. In equities, there have been times when it had been negative on small and midcaps, but at the present moment they are positive on almost all the categories. They been recommending five year SIP for all investors in small and mid-caps. While volatility in markets will remain, the space is now fairly valued.
Nifty as benchmark: Large-cap is generally a more defensive theme, but over the next 5, 10, 20 years it would be out of a 500-stock index kind of portfolio because even globally it is the 500- stock portfolio, which has actually been most favoured, no one talks of Dow Jones, everyone talks of S&P 500.
On overvalued sectors: Consumer pack is overvalued for quite some time. While the company has been saying this for the past two-three years there has been no meaningful correction. PSU’s as a pack are looking cheap and have corrected meaningfully.
PSU holdings: The AMC has big holdings in PSUs. PSUs where outlook looks good for the next 5 years and are trading at single digit price to earnings with dividend yield of more than 4- 5% is the segment which they are focusing on. There are no sector biases. They have the highest holding of PSUs in the last three four years.
Earnings recovery: FY20 would be a very good year for earnings growth and they expect more than 20-30% in large cap index in 2020. Earnings are due for a good rebound as market repair, economy repair, non performing loan repair have happened.
On Elections: No fund manager has any clarity on elections and how markets will respond etc. India is attractive market to be in for the long term. The markets may not be as attractive as in 2013-14, but we are in a different phase in the market.
On NBFCs: There are no major systemic problems in this year. They are selective on debt side of NBFCs while in case of equities, the AMC is more positive on banks than NBFCs at this point of time. So the view is mixed. They are positive on all banks with good CASA franchise and good corporate loan book.
On Other sectors: On IT the AMC has moved to underweight, overweight on Power Utilities while positive on healthcare and telecom.
On Nifty/ Sensex in FY20: Investors should look at the next three to five years in equities.
On FII inflows: Most of the FIIs are pretty positive on the Indian corporate from five to ten year view.
On Commodity derivatives: They are considering the options and kind of products as the circular has just come.