An eminent panel sat together in PMS Bazaar Conclave 2024 held in Bengaluru to show how fund managers get their excess market-beating returns. Given all the spotlight on the India growth story, they shed light on which macro factor was driving this economic upswing.
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Here is what the panel discussed:
Speakers: Amit Jeswani, Founder & CEO of Stallion Asset, Anil Rego, CEO & CIO of Right Horizons, Sonam Srivastava, Founder & CEO of Wright Research, and Varun Goenka, Director, Investments, Valuequest Investment Advisors.
Moderator: Shailendra Kumar, Co-founder FinAtoZ.
Jeswani said the growth in per capita income is sure to be a critical driving factor, irrespective of global challenges. From $2300 currently, India’s per capita would grow to $5000 and higher levels in the coming years, in his opinion, and the country was where the US was in 1982 and the rise in per capita is set to be a game-changer. Rego then opined that India’s demographic dividend is all set to be reaped now and was a critical factor. Srivastava then came in and said technology (AI etc.), mobile and Aadhaar are set to drive India to greater heights.
India’s much higher GDP growth rate compared to the advanced economies and indeed the global economy would be a key differentiator for the country in Goenka’s view. He was of the opinion that India could grow irrespective of whether the world economy rose or not and cited the examples of Japan, South Korea and China from the previous decades.
When Kumar then sought to understand what to make of the market volatility in recent times, Mr Goenka noted that Indian corporates were in a position of strength and could easily weather. He observed that Indian corporates had $176 billion in profits and $236 billion in cash flows, and had significantly de-leveraged their balance sheets. Kumar wanted experts’ opinions on what the dominant themes for investment would be for the foreseeable future.
Jeswani observed that irrespective of themes, the focus must be on companies that are gaining market share across sectors. The discussion then veered towards how quality and value would play out in the market.
Goenka noted that quality as such may not be that useful for generating returns. Quality has to come with reasonable growth and valuations to make a meaningful investment case. To a question on where HNIs should look to invest, Srivastava noted how quant-driven strategies with Artificial Intelligence and defined algorithms that are optimised for multiple timeframes appeal to new-age investors.
Jeswani was of the view that equity is about alpha creation and that index investing has given almost the same returns as gold over the past many decades. Therefore, for stronger compounding, investors needed to think bigger about active investing.
The panellists then set out to answer questions from the audience, which centred around per capita income translating to better growth and queries on execution from government and industry for faster growth, taxes, transparency etc.
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