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SIPs are the best way for retail investor

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The Managing Director and CEO of Tata Asset Management Arvind Sethi feels systematic investment plans (SIPs) are the best way for the retail investor. …

The Managing Director and CEO of Tata Asset Management Arvind Sethi feels systematic investment plans (SIPs) are the best way for the retail investor.

In an interview with Business Line, Mr.Sethi has also provided his insights into the issues faced by the mutual fund industry and his fund house.

Published in: Economy & Finance

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  • 1. +         powered by bluebytes       Saturday , June 07, 2014     SIPs are the best way for retail investor    (also see in Jpeg)    Publication: The Hindu Business Line , Agency:Bureau, Edition:Pune/Delhi/Chandigarh/Hyderabad/Chennai/Ahmedabad/Mumbai/Bangalore/Kolkata , Page No: 7, Location: Bottom , Size(sq.cms): 320        SIPs are the best way for retail investor    How has your interaction  with the intermediaries  changed?  We are constantly in dialogue  with them. Challenge for the in­ termediary is to gain the trust of  the investor. They have to instil  confidence that their advice is  n o t   b i a s e d .   W i t h o u t   t h e   intermediary, our industry  cannot grow.  What is your immediate  focus — growth or  profitability?  At the moment, it has to be  growth. We would not like to  go for businesses that are  below 10 basis points. Genuine  retail investors are much more  sticky, especially those coming  in through distributors and  financial advisors.  How do you go about getting  the sticky retail business?  I have been to towns such as  Kot­tayam, Trichur, Salem,  Kota, Ran­chi and Durgapur.  Willingness to deal with the  Ta­tas is great. The challenge is  convert this goodwill into  AUM. It  At the moment, our focus  is on growth. We would  not like to go for  businesses that are below  W basis points.  ARVIND SETHI,  MD & CEO, Tata Asset Management  It is good from an age perspec­ tive. However, timing wise, it  might not be a good time to get  into equities when one begins.  Investors should definitely  h a v e   a   b a s i c   i d e a   o f   t h e   investments he's getting into.  You cannot keep blaming the  person who sold it to you.          K RACHAVENDRA RAO  MumbaiJuneG  The Managing Director and CEO  of Tata Asset Management  Arvind Sethi feels systematic  investment plans (SIPs) are the  best way for the retail investor.  A veteran in the banking and  financial services space, he  started out as a journalist  and then branched out to  work in treasuries of  several foreign banks,  besides leading the Fixed  Income Money Market and  Derivatives Association of India  and joining RBI's Technical  Advisory Committee on Foreign  Exchange and Bond Markets.  In an interview with Business  Line, Sethi provides insights into  the issues faced by the mutual  fund industry and his fund house.  What is your take on  redemptions in equity  schemes of late?  We are getting redemptions on  every equity rally. Most MFs have  seen this. Even in the last five  years, SIPs have given 10 per  cent  returns. Increase the time hori­ zon and the returns are better.  How does one go about  investing in such a  climate?  You need to spread across  asset classes, especially debt.  Do it through mutual  funds. Equities have  returned 26 per cent  over the last 10 years  doubling every three  y e a r s .   T h e r e   i s   a   missed­the­bus­syn­drome  because of under ownership  that it would still go up. Then,  the retail comes in and the  market goes down and you end  up saying you have not made  money.  One needs to understand  that different asset classes  have different rates of return as  a l s o   t h e   p o w e r   o f   compounding. You make  money by holding and knowing  the company you are holding.  How good is age­based  asset allocation? 

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