House Voice

Consumption theme still prevails

Waqar Naqvi, CEO, Taurus MF says, investors should not worry about the short-term volatility of equity as it will give higher returns than any other asset class in the long-run

Consumption theme still prevails

The previous year was a good year for the industry, including for Taurus Mutual Fund, though we had our share of ups and downs.

Risk controls
Mutual funds, being market-linked, are likely to mirror market returns. However, we have proactively acted to continuously review portfolios and portfolio performance to ensure that timely corrective action can be taken.

Consumption theme still prevails

Rising industry assets
As of now, our assets have not risen to a level to pose challenges which cannot be handled by our team. Further, rising assets have also added to the depth of the markets and are, therefore, contributing to a virtuous cycle.

Growing clout of domestic funds vis-a-vis FIIs
Given the inflows into the mutual fund industry on the back of rising markets and lower rate of returns from fixed deposits, we have seen several instances of FII selling and DII buying. Mutual funds in India are certainly moving in a direction where one could say that they have come of age.

Outlook for equity and debt
Equity markets are likely to sustain the positive momentum for some more time, provided growth picks up on the back of suitable fiscal and monetary stimuli. The valuations of equities are a bit high. However, the Indian economy retains its demographics and the consumption theme. We believe that the profits of the corporate sector will sooner or later catch up with the valuations.

On debt markets, interest rates are more likely to fall than rise. This is on the back of the economy's enhanced capacity to absorb inflationary shocks. Under these circumstances, bond funds are likely to provide stable returns in the medium term.

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