'No segment is currently cheap; many businesses are fairly priced'

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

Market valuations are a concern, particularly in small caps and thematic areas. It's inaccurate to label the entire market as expensive. No segment is currently cheap, but many businesses are fairly priced, with few showing froth.

Over the past five years, our investable universe has nearly doubled to 500 companies. While 70 per cent of the market seems stretched, 30 per cent has opportunities for identifying high-quality businesses at reasonable prices.

At Mirae Asset Mutual Fund, we focus on fundamental analysis and careful stock selection. We are also prepared for potential corrections by maintaining a disciplined and balanced approach, ensuring we are well-positioned across different market conditions while staying aligned with our long-term investment strategy.

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

We view these as key components of the future investment landscape. Increasing retail investor, institutional and high-net-worth individual participation drives the growth in passive investing. These products offer a compelling combination of low cost and transparency, providing investors with targeted exposure to specific sectors with strong performance.

Demand for differentiated strategies like smart beta and thematic products is growing. Passive funds will play an increasingly prominent role as investors seek efficient and tailored options. We are committed to leading that evolution.

Will AI impact your business? How and why?

AI's potential to reshape the mutual fund industry is undeniable. It will enhance decision-making, allow dynamically adapting to market changes, and offer more personalised solutions. Our focus on AI-driven investment opportunities is reflected in being among the first in the industry to offer a fund like the Mirae Asset Global X Artificial Intelligence and Technology ETF FOF.

AI will improve operational efficiency through the automation of routine processes. As India's financial sector grows, AI will play an integral role in making investing simpler and more impactful for a wider audience.

Rapid-fire questions

• If your fund house had a superpower for investors, what would it be?
  Helping people achieve all their financial goals.
• The biggest mutual fund myth you'd debunk.
  Over-reliance on past returns. Future potential matters more for wealth creation.
• An unconventional asset class you'd add to your portfolio.
  Art. It offers both cultural enrichment and potential financial appreciation.
• A Bollywood movie that best represents the mutual fund industry today.
  Lakshya. The industry has found its footing and is set to chase bigger milestones, paralleling its future exponential rise.

This article was originally published on October 30, 2024.