Chai Pe Charcha with Atul Kumar

Posted On Wednesday, Sep 14, 2016

Q&A with Atul Kumar, Head-Equity Funds, Quantum AMC

How are you viewing the result season this quarter? Which sectors are you bullish/bearish?
The result season has been mixed so far. However, the overall demand environment still remains subdued. The nature of our process is that we are sector agnostic, and have no preference or bias for/against any. That said, based on current valuations we happen to have overweight positions in stocks that we like irrespective of the sector. To reiterate, though, this is strictly an output of the bottom-up process we practice.

What is your outlook for the global and Indian economy?
Global growth remains subdued in the developed world, with the exception of the US. Questions remain over growth path of China as well, as it comes back down to earth after having enjoyed years of rapid growth. On the flip side, we are optimistic on India's GDP growth, and believe it can grow at a rate of 6-6.5% for many years.

Do you see Fed raising rates in September? What is your take on the interest front and how do you see it panning out going forward?
We think there's a reasonable probability of the Fed hiking rates one more time this year. The United States has achieved almost full employment, which typically demands a rate hike to stave off budding inflationary pressures. The one offset to that is the weak global economy, which would merely delay rather than rule out another rate hike in the foreseeable future.

What is your investment philosophy? Has it changed in the recent years?
We like to buy good/sustainable businesses, run by capable management and available at reasonable valuations. These companies should exhibit decent corporate governance and no history of being unfair to minority shareholders.

There has been no change in the investment philosophy over the years. It is a tried, tested, and proven methodology which has been extremely successful over the years.

What kind of investors should look at investing here?
We believe that equity investment should be conceptualized on a long-term basis, meaning longer than two to three years. (I would note though that our average holding period is even longer than that, nearly five years.) We recruit the sort of investor who understands that investing is a marathon and not a sprint and is not looking to 'churn' the portfolio.

While our performance has had its ups and downs, on a long-term basis there is no denying its success - over the 10 year period ended in March, 2016.

Investors must understand that their investments should always be linked to their financial goals, but in any long-term allocation plan there is a place for equity.

What is your advice to retail investors at this juncture?
Given India's growth outlook and relative insulation from certain global concerns, we believe this is a good time to invest in Indian equities. We believe retail investors should use SIP and SWP avenues to enter and exit the markets.

What would be the triggers for growth for the MF industry?
In my view for the MF industry to grow, we first need to educate investors. The lack of knowledge about investing in equities via a mutual fund is undoubtedly keeping potential investors away. The perception of mutual funds as a 'risky' investment avenue has to be changed and they should understand the benefits of professional fund management. India has an outstanding future ahead of her, and the equity markets are an excellent way for the individual to participate in and 'own' that story.

This story was originally published by IIFL on August 31, 2016.

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The views expressed here in this article / video are for general information and reading purpose only and do not constitute any guidelines and recommendations on any course of action to be followed by the reader. Quantum AMC / Quantum Mutual Fund is not guaranteeing / offering / communicating any indicative yield on investments made in the scheme(s). The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The article has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are fair and reasonable as on date. Readers of this article should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments.

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Please visit – to read scheme specific risk factors. Investors in the Scheme(s) are not being offered a guaranteed or assured rate of return and there can be no assurance that the schemes objective will be achieved and the NAV of the scheme(s) may go up and down depending upon the factors and forces affecting securities market. Investment in mutual fund units involves investment risk such as trading volumes, settlement risk, liquidity risk, default risk including possible loss of capital. Past performance of the sponsor / AMC / Mutual Fund does not indicate the future performance of the Scheme(s). Statutory Details: Quantum Mutual Fund (the Fund) has been constituted as a Trust under the Indian Trusts Act, 1882. Sponsor: Quantum Advisors Private Limited. (liability of Sponsor limited to Rs. 1,00,000/-) Trustee: Quantum Trustee Company Private Limited. Investment Manager: Quantum Asset Management Company Private Limited. The Sponsor, Trustee and Investment Manager are incorporated under the Companies Act, 1956.

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