'Active funds will continue to dominate the equity landscape'

How is your team viewing the current market valuations and preparing for possible corrections?

Though the overall markets look priced beyond fair valuation, we are seeing a very smart and evolved market behaviour. We are observing a good sectoral rotation happening from time to time, wherein the expensive sectors are going out of favour, and the underperforming sectors are seeing good demand. This way, while the markets are not correcting at a high level, each sector is going through its own correction once it becomes too expensive, giving us some comfort while deploying assets across our schemes.

Are index and factor-based passive funds a fad or a lasting investment strategy?

At Canara Robeco AMC, we believe that the maturity level of investors in India is increasing rapidly. This will ensure a fair demand for all products or investment vehicles. Passive funds have already witnessed a good run and we expect them to continue to grow at a steady pace. However, we believe active funds will continue to dominate the equity investment landscape, keeping in mind the alpha-generating potential across market capitalisation.

Will AI impact your business? How and why?

If explored diligently, AI can assist across all the major functions of any AMC. As we can see, the biggest impact areas of AI could be operations and customer services. AI is all about understanding past behaviour or patterns and predicting what it could be in the future. It also helps streamline the processes and make them less complicated, which is essential for operations and customer services.

Rapid-fire questions

• If your fund house had a superpower for investors, what would it be?
  Markets should only go one way, and that's up.
  
• The biggest mutual fund myth you'd debunk.
  That markets only go up!
  
• An unconventional asset class you'd add to your portfolio.
  None.
  
• A Bollywood movie that best represents the mutual fund industry today.
  Iqbal shows how a good coach or mentor can help you achieve your goals. Similarly, a good AMC and financial advisor can help investors achieve their goals.

This article was originally published on October 28, 2024.