Mutual Fund Investment: If the number of rich increased, then this product became for HNI Investors, who is ahead in this! – Number of HNI investors increasing in India, a separate mutual fund product serving them

A report by Knight Frank says that the number of HNIs here is expected to increase by 75% during the next five years. So all the AMC wants to do is to reach out to more and more investors. To provide best portfolio management services to the wealthy with a combined effort of individual and institutional touch. You should know what is happening in the stock market, but do not have to maneuver it yourself. There are professional people to do this. The Alternative Investments team of the AMC strives to build index agnostic high quality portfolios. This means that there is a high active overweight or underweight facing the respective benchmark.

Experts say that even ordinary Asset Management Companies (AMCs) have offers for portfolio management services. However, some AMCs lack the personal touch. Hence, affluent customers look for an AMC that not only offers portfolio management services but also provides investment opportunities in specially designed products for the affluent. Meaning that the AMC which fits in between the two, has a higher asking price.

Who gave better returns even in times of crisis

You know that the year 2022 was a year full of great upheavals. Last year the rate of inflation was very high. At the same time, interest rates also continued to rise. Meanwhile, due to the Russo-Ukraine war and fears of a global recession, markets around the world experienced a sharp decline. In such a situation, the PMS strategy of ICICI Prudential AMC gave very encouraging results to the investors. In fact, this AMC runs its alternative investment business under a separate umbrella called ICICI Prudential Alternative Investments. Hence its PMS PIPE strategy and PMS Contra strategy are the best performers in the year 2022. It gained 20 per cent each. ICICI Prudential PMS Flexi Cap Strategy was among the top five best performers. These benefits are notable as most PMS schemes with AUM (Assets Under Management) of more than Rs 500 crore have given negative returns during the same period. The long-term performance of these schemes was even better. Over the three-year period ending December 31, 2022, the three schemes delivered returns of 29 per cent, 24 per cent and 17 per cent, respectively.

Which factors worked for mutual funds

Anand Shah, head of PMS and AIF investments at ICICI Prudential AMC, says that the factor that worked for mutual funds is the BMV (Business-Management-Valuation) triad. The BMV framework is about picking companies with strong business models, quality management and fair valuations. For example, the PMS portfolio remained underweight on IT stocks in 2022 due to its rich valuations, even though IT companies have sound businesses and quality management. Believing that the space was reasonably positioned in terms of net stressed loans, growth outlook, CASA and resilient portfolios like Covid-19, AMCs over time dominated banks. This approach kept his schemes safe. They took full advantage of the spectacular rally seen in beaten down banking stocks.

a position of comfort is not always profitable

Anand Shah says it is important to understand that a comfortable position is not always profitable. Therefore, a good business does not always mean that it is a good investment opportunity. Besides, good businesses that are known to everyone often don’t come cheap. Thus it becomes important to avoid following market trends while identifying the right companies. We aim to identify investment ideas that have not yet been fully explored. The AMC has a strong team of research experts and fund managers who have a long term approach and build a healthy portfolio with good risk-reward potential. Shah says that if one is investing for the long term, stability in income growth must be considered. We also believe that by identifying good sector companies with future growth and earnings potential, one can aim to overcome short term market volatility and focus on long term value creation.

Many changes are going to happen in 2023

Many changes are visible on the global stage. China is no longer the factory of the world. Globally, companies are looking for alternatives to China, known as the China+1 strategy. Here India is a big beneficiary through the Make in India initiative. In the last few years, the government has made several reforms to promote manufacturing in the country. This is happening at a time when manufacturing and manufacturing-related companies have underperformed over the past decade. As a result, many companies operating in this space are present at reasonable rates. Projecting the year 2023 and beyond, Shah says, he believes that the wheel of growth could turn towards sectors like manufacturing and allied businesses, banking, telecom, real estate. So he sees opportunities in niche companies within telecom and real estate where both earnings support and valuations seem reasonable. He is neutral on IT sector, but when investment prospects are better then we can expect it.