 "Vetri Subramaniam, managing director and chief executive officer designate at UTI Asset Management Company")
Vetri Subramaniam, managing director and chief executive officer designate at UTI Asset Management Company, tells Puneet Wadhwa in an email interview that for those investing via the systematic investment plan (SIP) route, it is important that contributions are diversified across schemes by market capitalisation in the current market scenario. Edited excerpts:
After the goods and services tax recalibration, do you think the government has maxed out on policy initiatives from a short- to medium-term perspective?
There is still scope for the government to do more, but equally, companies and other constituents of the economy have room to act. I don’t believe that either the government or companies should focus on short-term adrenaline shots for the markets.
Investors in India are doing the right thing by allocating to equities in a disciplined manner through SIPs and systematic transfer plans. The benefits will accrue over the long term through sustained growth in the economy, corporate earnings, and good governance.
What has been your biggest investing lesson thus far in calendar year 2025?
The changes being orchestrated by the new US administration are disrupting conventions and policy frameworks that have defined global trade and finance in the post–Cold War era. Simultaneously, geopolitical arrangements are also being shaken. This, combined with the tariff war, has created a high level of uncertainty.
So far, the US economy and markets have remained largely unfazed, buoyed up by strong spending on artificial intelligence. The resilience of US economic data and markets in the face of uncertainty and the potential long-term consequences of these disruptions is remarkable.
The takeaway is that market movements are driven by multiple variables — a truth that remains as relevant in 2025 as it has been at any point in the past or will be in the future.
How should investors position their portfolios to maximise gains in the current markets?
The market has seen a period of earnings growth combined with multiple expansions over the past five years. Now, the emphasis should be more on earnings growth rather than multiple expansion.
Drilling down further, we would be cautious of elevated valuations in sectors that have posted higher-than-normal earnings growth in this cycle. These are general observations; in my experience, stock-picking has always been critical.
Should investors opt only for largecap funds/stocks in the current market scenario?
Largecap valuations are in the “fair value” zone. Our internal equity valuation index, which guides equity allocation in our hybrid strategies, signalled an increase in equity exposure in early September. However, mid and smallcap valuations remain elevated. For investors planning lump-sum investments, our bias is towards largecap-oriented schemes rather than standalone mid or smallcap funds.
For those pursuing SIPs, contributions must be diversified across schemes by market capitalisation. Hybrid funds are suitable for lump-sum investments in the current environment.
To what extent are the markets factoring in weather conditions and their impact on overall inflation, rate cuts, etc.?
Recent weather events, such as the monsoon, may have a micro-market impact, and my concern is for the affected communities. However, I don’t believe these events will significantly affect the country’s overall economic growth. Inflation has remained within the target zone, and we expect the Core Consumer Price Index to remain well-contained.
Headline inflation drives policy decisions by the Monetary Policy Committee, and we may see another rate cut. The pro-cyclical boost to economic growth would come from a pickup in banking credit supported by ample liquidity, and additional rate cuts may offer diminishing returns.
The unshakeable market
- US policy shifts are rewriting post-Cold War trade and finance rules
- Geopolitical tensions and tariff wars amplify uncertainty
- Markets remain resilient, supported by strategic AI investment and spending
- Market movements are shaped by multiple forces — yesterday, today, and tomorrow
