“There is value for the patient investors”
Over the last four years, the investment engine in India has slowed down owing to some domestic and global factors, but there is money to be made in long term, believes Ved Prakash Chaturvedi, CEO – Capital Markets and Investment Management, L&T Finance. "For an exciting market like India, it is difficult to say equity has lost its charm," he said in an interview with Ritu Kant Ojha.
The investors are losing patience with equity. Do you agree equity has gradually lost its charm over last three years?
The Indian equities market is being influenced by several factors — concerns about Eurozone, domestic inflation, interest rate and the rupee situation and a close watch of foreign investors on growth of our economy and earnings growth of various companies. In the near term it is expected that gloomy sentiment in business and investment and some headwinds from overseas markets and news flow may reflect in the market movement. However, the general belief now is that the worst period of our equity market is behind us and if some positive things fall in place, market sentiment may improve significantly. Thus, it is difficult to say that equity investing has lost its charm. Systematic, disciplined and patient investing in equity funds would create wealth in the long term.
Investors have not made any serious money over the last few years. Why should they continue investing in mutual funds?
Mutual funds offer a range of risk-return investment options in equity/ hybrid/ fixed-income securities. Investment in hybrid and fixed income funds have done well over the last five years. Owing to a combination of local and global factors equity funds have not performed. Medium term equity fund performance depends on performance of the economy and that of individual companies. But the engines of consumption, global business opportunities and financial intermediation are continuing to drive growth in their respective sectors. My sense is that the Indian economy will continue to grow at a rate significantly above that of other comparable economies. This will create medium term value for patient systematic investors.
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