'We recognise the growing significance of passive strategies'

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

While current valuations may be slightly elevated, we feel they align with the expectations of India being the fastest-growing economy. At ITI Mutual Fund, we usually take a long-term view of market valuations and recognise that market cycles are a natural part of investing. Our investment team focuses on identifying fundamentally strong companies with sustainable growth potential, regardless of short-term fluctuations.

While timing corrections could be anyone's guess, we've ensured proper diversification across sectors and market caps. When investing, we conduct rigorous research and analysis, mitigating the impact of sector-specific volatility. Remember that corrections are a normal part of investment cycles. A long-term perspective and a disciplined investment approach are crucial for financial success.

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

While some view passive funds as a fad, we believe they're here to stay and will continue playing a major role in the investment landscape. Growth in passive investing is driven by many fundamental factors that are unlikely to reverse soon. Passive funds offer a cost-effective and accessible way for all investors to participate. With a transparent and straightforward approach, they appeal to those seeking simplicity and clarity.

While we firmly believe in the value of active management and fund managers' expertise, we recognise the growing significance of passive strategies. We feel passive funds won't replace but complement active management. We are evaluating the evolving investment landscape and aim to provide our clients with investment options catering to their needs.

Will AI impact your business? How and why?

Various factors must be assessed before investing, like quantitative analysis of annual reports, profits, dividends, etc., and qualitative analysis of customers, management, competitors, underlying business, etc. GenAI applications will enhance investors' and partners' experience and boost efficiency. AI will enable acquisition, onboarding and servicing, helping focus more on human aspects of customer relationships.

Rapid-fire questions

• If your fund house had a superpower for investors, what would it be?
  Our well-defined investment and risk management framework, backed by in-depth research, helps generate superior risk-adjusted returns.
• The biggest mutual fund myth you'd debunk.
  That mutual funds invest only in the equity market.
• An unconventional asset class you'd add to your portfolio.
  Venture capital funds investing in start-ups.
• A Bollywood movie that best represents the mutual fund industry today.
  Baghban.

This article was originally published on October 29, 2024.