Long-term investment must in troubled times: MF honchos

Mumbai, Oct 28 | Updated: Oct 29 2004, 05:31am hrs
Be it a bear or a bull market, the trick is to remain invested with a long-term horizon, say mutual fund bigwigs in a chief investment officers meet organised by Mata Securities, one of the largest MF distributors, on Wednesday.

That foreign institutional investors have remained invested in the Indian markets, in spite of uncertainty, is proof of the fact that India remains an attractive destination worldwide, said Sanjiv Duggal, CIO, HSBC Mutual Fund.

There is no denying that it is the valuation factor that is providing support to FIIs. This is despite the fact that Indian valuations are at par with the rest of the Asian markets. However, the demographic profile of India sets Indian markets apart. Though globally people are putting India and China in the same basket, India is the fastest growing economy, the third largest globally, Duggal explained.

However, all is not rosy, pointed out Nilesh Shah, CIO, Prudential ICICI AMC. Global commodity prices have had a adverse impact on Indian bourses. This, along with the high-profile initial public offering by the likes of TCS and NTPC, has sapped out the liquidity.

The tenacity of Indian markets is, however, commendable. Though inflation continues to be a major cause for concern, markets are range-bound and this factor has been partially factored into the prices, Nilesh Shah opined. Systematic investments over a longer period of time is bound to yield better returns to mutual fund investors, he advised.

Speaking on the discipline of investing in the markets, S Naganath, CIO, DSP Merill Lynch Fund Managers, said: There is no substitute for long-term investments, be it of any nature. Most investors end up burning their fingers while timing the markets. Its not timing but diversification across asset classes over a longer time that will bear fruits. Explaining the cyclical nature of the bourses, Naganath said: Its against the depreciation of the US dollar that investors worldwide are opting for hard commodities like oil and gold. But this is clearly a cycle and there is bound to be a change in the near term.