SIPs are the best way for retail investor
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Saturday , June 07, 2014
SIPs are the best way for retail investor (also see in Jpeg)
Publication: The Hindu Business Line , Agency:Bureau, Edition:Pune/Delhi/Chandigarh/Hyderabad/Chennai/Ahmedabad/Mumbai/Bangalore/Kolkata , Page No: 7, Location: Bottom , Size(sq.cms): 320
SIPs are the best way for retail investor
How has your interaction with the intermediaries changed? We are constantly in dialogue with them. Challenge for the intermediary is to gain the trust of the investor. They have to instil confidence that their advice is n o t b i a s e d . W i t h o u t t h e intermed i a r y , o u r i n d u s t r y cannot grow.
What is your immediate focus — growth or profitability? At the moment, i t has to be growth. We would not like to go fo r bus inesses tha t a re below 10 basis points. Genuine retail investors are much more sticky, especially those coming in through distr ibutors and financial advisors.
How do you go about getting the sticky retail business? I have been to towns such as Kottayam, Trichur, Salem, Kota, Ranchi and Durgapur. Willingness to deal with the
Tatas is great. The challenge is conve r t t h i s goodwi l l i n to AUM. It
At the moment, our focus is on growth. We would not like to go for businesses that are below W basis points. ARVIND SETHI, MD & CEO, Tata Asset Management
It is good from an age perspective. However, timing wise, it might not be a good time to get into equities when one begins. Investors should definitely h a v e a b a s i c i d e a o f t h e investments he's getting into. You cannot keep blaming the person who sold it to you.
K RACHAVENDRA RAO MumbaiJuneG The Managing Director and CEO of Tata Asset Management Arvind Sethi feels systematic investment plans (SIPs) are the best way for the retail investor. A veteran in the banking and
financial services space, he started out as a journalist and then branched out to work in treasuries of several foreign banks, besides leading the Fixed Income Money Market and Derivatives Association of India and joining RBI's Technical Advisory Committee on Foreign Exchange and Bond Markets. In an interview with Business
Line, Sethi provides insights into the issues faced by the mutual fund industry and his fund house. What is your take on redemptions in equity schemes of late? We are getting redemptions on every equity rally. Most MFs have seen this. Even in the last five years, SIPs have given 10 per cent
returns. Increase the time horizon and the returns are better.
How does one go about investing in such a climate? You need to spread across asset classes, especially debt.
Do it through mutual funds. Equities have returned 26 per cent over the last 10 years doubling every three y e a r s . T h e r e i s a
missedthebussyndrome because of under ownership that it would still go up. Then, the retai l comes in and the market goes down and you end up saying you have not made money. One needs to understand
that different asset classes have different rates of return as a l s o t h e p o w e r o f c ompound i ng . You make money by holding and knowing the company you are holding.
How good is agebased asset allocation?