Q&A: Sunil Singhania, Head-Equities, Reliance Mutual Fund

'Don't get jittery about volatility'

Sunil Singhania, head-equities, Reliance Mutual Fund, tells Neha Pandey that the markets will stabilise soon and continue to rise. Edited excerpts:

How long do you see the correction lasting? Where do you see the markets in the next six months to one year?
We continue to believe the economy and equity markets will maintain their long-term growth phase. Corrections of 10-15 per cent can happen in any market. Our advice to investors would be to have a long-term investment horizon, and not get shaken by near-term news-based market volatility. Short-term jitters can never impact the inevitable long-term growth in the markets. We feel the markets will stabilise soon and resume their measured uptick.

In the current market, which sectors are you betting on?
We continue to be bullish on a wide range of sectors. Among the domestic themes, we favour of banks, capital spending and infrastructure-related sectors, including cement. Among the growth-oriented sectors, our view continues to be bullish on pharmaceuticals. We are also positive on information technology and will use the metal pack as a trading play based on price movements.

If a retail investor has a lump sum, should he/she invest in the current market?
The best strategy for a retail investor is to invest in mutual funds via systematic investment plans. Wealth creation for those with regular incomes could be through regular, disciplined investing. For a big investor, who has under-invested in equities, the correction can be used to correct his position and park a lump sum.

Would you advise retail investors to opt for midcap and smallcap stocks? Are there any multi-baggers there?
A diverse economy and a strong entrepreneurial mindset make our markets the best place for bottoms-up stock-picking. Although midcap and smallcap stocks tend to be volatile in the near term, investors with a long-investment horizon can look at investing in good midcap-oriented equity funds. Mutual funds are the best, safe way to invest in equity for retail investors.

What is your outlook on precious metals? Should one accumulate gold, maybe via exchange-traded funds (ETFs)?
We continue to be positive on gold, as it lends good diversification in the overall portfolio of an investor. Gold ETFs make for a very liquid investment compared with physical gold.

Is investing in IPOs and FPOs advisable for retail investors? Any upcoming one that you are betting on?
Good quality IPOs and FPOs have proven to be good return generators. Thus, investors should definitely invest in public offerings, provided the quality of the company is good and the IPO price is attractive, and not overvalued.