With 28 years of rich experience in fund management, we at SBI Funds Management Pvt. Ltd. bring forward our expertise by consistently delivering value to our investors. We have a strong and proud lineage that traces back to the State Bank of India (SBI) - India's largest bank. We are a Joint Venture between SBI and AMUNDI (France), one of the world's leading fund management companies.
In a conversation with Sarika Kodag of IIFL, Rajeev Radhakrishnan says, “With the revised liquidity management framework, it is expected that any surge in capital flows would largely be absorbed by the RBI, leading to potential liquidity infusion consistent with the extant monetary policy stance.”
What is your outlook for the debt capital market in India?
The trend of disintermediation is expected to continue going forward. This along with regulatory changes, introduction of new instruments, market transparency and more participation from overseas investors over a period of time, provides headroom for a vibrant development of the debt capital markets in India.
What is your opinion on the currency movement? How has it affected the liquidity in the system?
Currency market developments have an important bearing on the outlook of FPI investor’s investment in India. Notwithstanding stronger external sector fundamentals, the currency market in the near term would be guided by capital flow trends and global market developments. With the revised liquidity management framework, it is expected that any surge in capital flows would largely be absorbed by the RBI, leading to potential liquidity infusion consistent with the extant monetary policy stance.
What is your take on the interest front and how do you see it panning out, going forward?
While monetary policy stance remains accommodative, the bar for additional policy cuts remain higher given the structural factors underpinning the domestic inflation outlook. In an environment of stable policy rates and with liquidity infusion measures, market rates especially at the shorter end, can still trend lower over a period of time as the liquidity premium reduces.
Comment on the current market situation and the growth of Indian ETF market?
The market for ETF is expected to show a steady growth.
Could you please share the investment philosophy behind SBI-ETF 10 year Gilt Fund?
The 10 year Gilt ETF is intended to provide investors a passive exposure to the benchmark 10 year sovereign paper.
Discuss about the SBI-ETF 10 year gilt, considering it is a passive fund?
The investors are exposed to the total returns from the benchmark sovereign security over the investment tenure, in a more efficient manner. The fund is suitable for investors who understand the inherent interest rate risks in the debt market and having specific view on the same.
What is your advice to investors on investing in debt funds and ETFs?
Investors should consider their individual risk tolerance and time horizon while investing in debt funds. Overall the exposures should be consistent with their intended asset allocation framework.