the goan I network
PANAJI
Even though most people want to make a quick buck in stock market, but experts say that one should have a minimum horizon of 10 to 15 years to make money in equities.
“If you invest for 1-3 years in equity funds, you may end up earning negative returns. You should have longer horizon like 10-15 years for wealth creation in equity funds,” said Swati Kulkarni, executive vice president and equity fund manager at UTI Mutual Fund.
Kulkarni further said that factors like elections and global events do not impact equity investments provided such investments are made for a long run. This is because the performance of a stock in long term depends upon the profitability of the underlying company.
Kulkarni manages three mutual funds “ UTI Mastershare (which is a large cap diversified fund), UTI Dividend Yield and UTI MNC Fund. When asked which sectors investors should consider, Kulkarni replied that she was focussing on information-technology (IT) sector and banking sector.
Banking sector has been badly affected by rising non-performing assets (NPAs) as a number of large corporate borrowers have faced severe problems.
“The Central Government and the Reserve Bank of India (RBI) have been saying for a while that banks should clean up their balance sheets. In the last 3-4 quarters, for banking sector, incremental slippages have come down. Therefore, I am positive about banking sector,” Kulkarni said.
“IT sector has sustainable cash flows. A number of IT companies are posting more than 30% return on capital employed (ROCE). Around the world, the clients are becoming more tech-savvy, which means IT companies will get good business. Outsourcing may go up with global slowdown,” she added.
UTI Mutual Fund’s team was recently in Goa to interact with financial advisors so that it could emphasize the importance of long term equity investments to retail investors through its distributors.
