Q&A: Ashu Suyash, FIL Fund Management

Ashu Suyash, managing director and country head, FIL Fund Management, talks to Neha Pandey about the market outlook and the cues an investor should take before investing. Edited excerpts:

What is your market outlook for short, medium and long terms?
We continue to be fairly positive on the economy’s long-term growth prospects. India’s large youth population means increased consumption and more capital if their savings are channelised. We are able to cushion a lot of global shocks. Efforts are already being made to improve infrastructure. If these result in an investment-led uptick in growth, the medium- to long-term prospects look good. In the short term, we are likely to be more vulnerable to global happenings.

Given the present markets, how should investors strategise their investments?
Systematic investment plans are my favourite. For the mutual fund industry, they act like a recurring deposit that give investors the advantage of compounding and helps them average costs.

Investors forget to top-up investments with every rise in salary, and that’s where wealth creation begins to fall short of aspirations. Remember, if you don’t increase investments every year, inflation will eat your savings.

How should an investor take cues from various data before investing in the markets?
Irrespective of the markets’ performance, an investor needs to assess his\her saving capability, time horizon and risk appetite. If his\her outlook is more than six months, he\she should not time the market.

Avoid re-jigging portfolio based on changes in the fund’s monthly net asset value. It shows you are allowing short-term movements drive your long-term decisions. If you have time on your side, and you are able to bear market fluctuations, you can invest a lump sum provided you have a long-term view.

How do you rate the combo theme — equity, debt and gold — that many fund houses have launched?
All these asset classes play vital roles in your portfolio. Buying gold is not about returns or wealth creation but about buying safety.

Is investing in feeder funds a good idea?
Feeder funds are the most cost-effective means of investment. You get better risk-adjusted returns, as feeders are used to bring in global products. If a mutual fund tries producing those products on its own, costs will be prohibitive.

If we look at an asset allocation type of product, we can either create it as a fund, or create a fund of funds structure for the investor to get better risk-optimised returns. The underlying building blocks of fund products are often funds with long and consistent performance track records, and also the best performing ones. Through this, it is possible for an investor to get the best of both the worlds.