Quantum AMC, was founded by Mr. Ajit Dayal, Chairman, Quantum Asset Management Company Private Limited (Quantum AMC) in 2006. Quantum Asset Management Company is India’s first dedicated, direct-to-investor mutual fund house offering 9 simple and easy-to-understand schemes across all 3 asset classes i.e. equity, debt and gold.
Replying to Anil Mascarenhas of IIFL, Atul Kumar says, “We recruit the sort of investor who understands that investing is a marathon and not a sprint and is not looking to ‘churn’ the portfolio.”
How are you viewing the result season this quarter? Which sectors are you bullish/bearish?
The result season has been mixed so far. However, the overall demand environment still remains subdued. The nature of our process is that we are sector agnostic, and have no preference or bias for/against any. That said, based on current valuations we happen to have overweight positions in stocks that we like irrespective of the sector. To reiterate, though, this is strictly an output of the bottom-up process we practice.
What is your outlook for the global and Indian economy?
Global growth remains subdued in the developed world, with the exception of the US. Questions remain over growth path of China as well, as it comes back down to earth after having enjoyed years of rapid growth. On the flip side, we are optimistic on India’s GDP growth, and believe it can grow at a rate of 6-6.5% for many years.
Do you see Fed raising rates in September? What is your take on the interest front and how do you see it panning out going forward?
We think there’s a reasonable probability of the Fed hiking rates one more time this year. The United States has achieved almost full employment, which typically demands a rate hike to stave off budding inflationary pressures. The one offset to that is the weak global economy, which would merely delay rather than rule out another rate hike in the foreseeable future.
What is your investment philosophy? Has it changed in the recent years?
We like to buy good/sustainable businesses, run by capable management and available at reasonable valuations. These companies should exhibit decent corporate governance and no history of being unfair to minority shareholders.
There has been no change in the investment philosophy over the years. It is a tried, tested, and proven methodology which has been extremely successful over the years.
What kind of investors should look at investing here?
We believe that equity investment should be conceptualized on a long-term basis, meaning longer than two to three years. (I would note though that our average holding period is even longer than that, nearly five years.) We recruit the sort of investor who understands that investing is a marathon and not a sprint and is not looking to ‘churn’ the portfolio.
While our performance has had its ups and downs, on a long-term basis there is no denying its success – over the 10 year period ended in March, 2016.
Investors must understand that their investments should always be linked to their financial goals, but in any long-term allocation plan there is a place for equity.
What is your advice to retail investors at this juncture?
Given India’s growth outlook and relative insulation from certain global concerns, we believe this is a good time to invest in Indian equities. We believe retail investors should use SIP and SWP avenues to enter and exit the markets.
What would be the triggers for growth for the MF industry?
In my view for the MF industry to grow, we first need to educate investors. The lack of knowledge about investing in equities via a mutual fund is undoubtedly keeping potential investors away. The perception of mutual funds as a ‘risky’ investment avenue has to be changed and they should understand the benefits of professional fund management. India has an outstanding future ahead of her, and the equity markets are an excellent way for the individual to participate in and ‘own’ that story.