Our major focus would be on attracting
retail equity assets: DBS Cholamandalam
October 22, 2006:
Yes, the indices have zoomed all right, notes Mr Rajnish Narula,
CEO, DBS Cholamandalam Mutual Fund, in a reference to the
recent increase in stock prices, including what was seen last
However, he adds a caveat or two to his observation:
"Investors would do well to have realistic expectations...
the next 3 to 5 years may well see 12-15 per cent returns
Some months have passed since the joint venture between Chola
and DBS has commenced business.
How is the market shaping
up for it?
DBS, as you may already know, happens to be among the largest
financial services groups in Asia with operations spanning
15 countries. It has leading positions in asset management,
consumer banking, treasury and markets, securities brokerage,
equity and debt fund raising.
The fund management business run by DBS currently
extends over a number of product categories. Its core competencies
are in global fixed income, Asian equities and absolute return
In India, the newly-formed asset management
joint venture has the opportunity to leverage the strengths
of the DBS group.
I am particularly referring to areas such as
quality of investment management, introduction of new product
categories and improvement in operational efficiency. The
idea is to create a certain value proposition for investors
Your asset base is relatively
small. What are major issues that this leads to?
Well, while size is an issue to contend with, we believe it
would not be a major hindrance to building our asset management
We would like to grow by attracting quality
long term investments in our schemes and delivering what I
would like to describe as "dependable" performance.
Our major focus would be on attracting retail equity assets.
And we would do that by working closely with a fewer set of
DBS Chola does have a range of products, including
quite a few on the equity side, each with a clear set of attributes.
In a situation where
the equity indices are moving up again, what are your views
on the equity market?
It is true that the market has displayed a certain degree
of resilience. However, we maintain that investors should
have realistic expectations.
To expect 12-15 per cent returns per annum over
the next 3 to 5 years is, in a manner of speaking, realistic.
As statisticians would no doubt tell you, domestic economic
momentum looks strong at the moment. This would perhaps continue
to be so. All this, one hopes, would lead to a good growth
in corporate profits.
Mind you, global risk factors in terms of liquidity
tightening and crude oil hardening have reduced considerably
in recent times. However, as always, these would need to be
monitored closely by all those who are interested in knowing
about latest trends.
Debt, some sections feel,
may turn the corner soon. Do you agree? What can change the
way investors consider debt funds in India?
It is expected that some amount of volatility would continue
in the debt market. While certain important global factors
would allow the interest rates to remain soft, strong domestic
growth would keep the upward pressure on interest rates. We
continue to urge investors to remain focused on short duration
assets, income funds included.