INTERVIEW

HNIs ARE HOLDING BACK

Abhay Rao
Posted: Sunday, Jul 05, 2009 at 2356 hrs IST
Updated: Sunday, Jul 05, 2009 at 2356 hrs IST

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‘People still prefer piracy to paying for world ci...

: Prashanth Narayan, CIO, PMS, multi manager strategies, ING Investment Management, spoke with Abhay Rao of the Financial Express about the new quantitative PMS products launched by ING, how they work differently and can form an important part of a persons equity portfolio. Excerpts:

•Why has the India Large Cap Quant equity portfolio and BSE 200 quant portfolio been launched under your PMS scheme?

The reason we have launched products like this under PMS is as in the broad sense mutual funds are for the mass and retail investors while PMS and structured products are more for the sophisticated investor. Given the product we have launched, which are quant portfolios, from our perspective we believe, that the investors need to understand what they are getting into, as apposed to a normal mutual fund where people have more experience and understanding. So number one here we need to make sure the investor understands what he is getting into and number two, it is a product which is for a focussed portfolio and it's not for a retail investor. Also, it is a product which will take a little more risk than a normal mutual fund. This means you need to have investors who can absorb a risk of this sort and hence a vehicle like PMS is far more suited for a product of this sort, rather than a normal MF. In PMS, the investors are more hand held and that is the motive of launching a more sophisticated bunch of products on the PMS platform rather than the funds platform.

•What makes these products more sophisticated and different from other products in the market?

The way we have constructed this product and the approach we take over here makes it equivalent to a long only equity product. However, the difference is that this is a very focussed portfolio, so we are talking about 15-17 chocolate portfolios only, which I feel is more than enough to diversify the market related risks. The fact is that the way we construct the portfolio is very different as well. So we do not do much of stock picking here, but what we do is focus more on portfolio construction. So what we are saying is that the Indian cricket team is better than a Sachin Tendulkar. So, we won't be picking the Sachin Tendulkar of the market, but we will pick a team that will perform well...

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