According to Vikas Khemani, founder and CIO of Carnelian Asset Advisors, the rapid growth, rising financialization of the market and the expansion of the investor base will release the way for multiple investment styles-from quantity-controlled models to value and fundamental approaches to each other and bloom.
Speaking at the sidelines of the APMI conference in Mumbai, Khemani noted that this is a natural progression that is seen in adult markets such as the US, and India is now ready to follow a similar process. Edited fragments –
Kshitij Anand: Well, just to start from the APMI perspective, why do you think this is a necessary step in the direction of creating a more holistic environment for portfolio managers?
Vikas Khemani: I think it’s an evolving industry. It is a fast -growing industry and many new players come in and offer very adapted, tailor -made solutions for customers. As every economy develops and grows, and the creation of wealth takes place, you need alternative products that are suitable for the needs of every customer.
So this is a very good association of such people who provide these services to customers. This association deals with many problems – from a regulatory framework perspective, an interest perspective of the customer and the perspective of a manager – and creates an environment to offer solutions for many challenges and growth opportunities.
Kshitij Anand: I remember that Carnelian is more structured as a group towards the Bharat -Mantra, or you could say the Bharat philosophy. How positive, how Gung-Ho are you now?
Vikas Khemani: I am very, very positive. India is located in one of the best cycles of the wealth we have ever seen. I feel that in the next 10 to 15 years as a country we will create a very considerable amount of wealth. I consider myself happiness that I am part of this cycle-we are all. There is a multidimensional chance here. Enormous wealth will be created and the share trip has just begun. But not only in equity and debts – in multiple asset classes you can see the financialization of assets. So I’m very excited.
We have a fund called the Bharat Amritkaal Fund, which catches fast -growing opportunities in the first place, because India is growing from a GDP of $ 4 trillion to a GDP of $ 10 trillion. That is a very, very big chance for us.
Kshitij Anand: I know it is a very simple question, but when we are with you, we certainly want to ask ourselves – Market Ka Kya Lagta Hai? Because a) many things happen on the tariff front. It is clear that we are currently seeing enormous sale of FIIs, but they are actually buyers in the IPO segment of the primary market. So yes, two love points that come in there – one is a hatred and one is a love. What is your thought?
Vikas Khemani: FIIs have been selling for three to four years now, so it’s not something new. Fortunately, the domests buy, which is great. Historically, Domestics, FIIs bought and created the wealth. This is a situation in which … it is a good situation.
Because the stock exposure of Indian households goes up, it is about 5-6%, while 10 years ago it was 1%, I think that it will go to 20-25%in the next 10-15 years. So it is a long journey and the domests can buy shares.
Foreigners will also come, undoubtedly in my mind. Especially when the FED rate starts to fall, you will see a lot of money flowing to emerging markets, and that is a journey that we will see in the coming times. I’m not worried about that.
Regarding the rates, these are problems in the short term. Indian exposure to American exports is very limited – $ 80 billion, which is very small. Of course you want to get it solved, and it will be resolved. Apart from the political theatrics, I think it will soon be established, because the fact is both India and the US need each other. Both are democracies, both are very open economies, and both are innovation -driven economies. So it is resolved – it’s just a matter of time, for three months or six months. In the meantime, I don’t think it destabilizes for the Indian markets or the economy.
Kshitij Anand: Looking at the wider perspective, how do you see the industry evolving? Because, as Mr Tuhin Kanta and Ashishkumar Chauhan also emphasized, the industry has grown with jumps over the past four to five years. New products come in, many quant -based methods also flow in and every day we see a new thematic fund being launched. How do you see the industry evolving in the coming years?
Vikas Khemani: Absolute. Just like the evolution of every economy, as the economy evolves, the markets become larger and larger, the heterogeneity of investors rises, and the products are also because it is necessary.
Someone is happy to even achieve a return of 10%, someone is happy to achieve a return of 15% and someone is looking for a return of 30%. So, in all assets … and there are different styles – fundamental style, value style, quantation style – can each create its own product and journey. That will happen. It is a very natural progression.
It also happens because of high financialization and the changing needs of investors, and you will see that it is only getting bigger and better.
In many markets such as the US you have large $ 20, $ 30, $ 40 billion funds that do this kind of work. You will see the same happening in India.
((Indemnification: Recommendations, suggestions, views and opinions of experts are their own. These do not represent the views of economic times)
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