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AIG Global Investment Group Mutual Fund: Navigating Rough Tides

We are firmly optimistic about the future of the industry because mutual funds are cost efficient and convenient vehicles to channelize household savings into capital markets.

In 2007 when AIG entered India, it had the right legacy and the parentage. In little over three years, it has been a victim of the global meltdown that has rendered the Indian operations inconsequential. Despite news reports of an imminent sale in India, Mehta puts a brave face and says; “The road ahead for is to build a long-term sustainable value for our customers and stake holders.”

Disappointing AUM growth: We expect the distribution business to mature and enhance value. We are firmly optimistic about the future of the industry because a mutual fund is a cost efficient and convenient vehicle to channel household savings into capital markets.

Regulatory changes: The AMCs and distribution will benefit, as customer base grows exponentially.

State of the market: Today, valuations are not very cheap in an absolute sense. Indian markets are trading at close to 20x P/E. Given the expectations of growth built into valuations, one would tend to be more careful and circumspect in stock picking.

My investing style: We believe that irrespective of market movements, stocks with good fundamentals progress and get rewarded over time. Our focus is on finding such companies. We follow a bottom-up methodology wherein we try and look for stocks with an outstanding profile available at fair valuations.