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Swarup Mohanty: When any one of us launches funds or starts building a track record in the fund, our job is to give an option to the investor. On Rohin’s side, it is deciding whether a particular fund needs to fit into a client’s portfolio based on the risk profile or the goal. Our job is to give a wide array of products.
When this whole thing of global investing started in India, it started a long time ago, but it’s really gotten serious in the last three to four years. Our first job was to bring two or three exciting products that were both on the core side of the portfolio as well as on the satellite side of the portfolio.
As you rightly said, we have the S&P Top 50, which is like a solid core portfolio, and we have at the extreme end the FAANG… What has unfolded in the world is not something that happens often. It’s a very special situation. The U.S. data is probably a one-time data in the last 40–50 years… The impact has been across not just in Nasdaq stocks but across the market.
When you look at our long-term investing, and I would believe anybody who invests in equity if he is a long-term investor, you have to know for a fact that these stocks comprise nearly 80% of the global market cap of the U.S. as a market.
India, with all its strength in the global economy, now accounts for three percent of the world’s total market cap. When you look at strong, time-tested products, yes, the S&P Top 50 or the S&P 500 is a core product that needs to be held over a period of time. The question is not whether you want FAANG or not.
The question is how much you allocate. If one is overallocated, then one would be concerned, and rightfully so, and will probably correct that in the future. It’s very niche… but it’s about the balance of your portfolio. If, when you look at investing, you are saying that the U.S. is not a good place to invest, then one needs to revisit that story.
If you look at the last 11 years, seven out of the last 11 years, the U.S. markets have been top performers. And look at the sizes of these companies; it’s just incredible that you get to own them at this moment. So yes, on the portfolio, they definitely make a case, and at this moment, since the data is so bad and the market is bleeding, you look at why Warren Buffett says, “You buy when it bleeds.” These are probably great accumulation times for those products, again with the caveat that one should stick to the right allocation. Allocation makes money, overallocation kills money. So that’s the bottom rule that one has to follow, while allocating.
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