KEA: Will the Sensex go below 16,000 (points)?
Prashant Jain, executive director and chief investment officer, HDFC Asset Management. Abhijit Bhatlekar / Mint
Jain: It’s hard to forecast markets in the short run. But our economy is doing well and a key variable is oil price. If a weak global economy leads to lower oil prices, it is positive for us. Markets are fairly valued. Over the medium to long term, returns should be in line with growth rates, around 15% per annum.
Brenda: How do you view index-linked funds?
Jain: The key issue is allocation to equities, whether through the index or active funds. In India, several funds have done better than the index over long periods.
Siddharth: Can we not have a price-earnings (P-E) ratio-based fund that buys at a P-E of 12-15 and sells at 24-27?
Jain: Theoretically, it is possible, but in practice, a P-E of 25 can go up to 30 and even 40, and a P-E of 15 can fall to 10-12. The reality is more money comes at higher P-E and vice versa. Since funds are open ended and P-E is known, one can take personalized investment decisions.
Also Read | HDFC Top 200 Growth
KEA: You have been with HDFC Mutual Fund for some time now. Since job markets are picking up and new fund houses are entering, should we read between the lines?
Jain: I have seen both good and poor job markets, but have been managing the same funds since 1994. I see no reason for that to change.
Siddharth: What is the difference between HDFC Equity Fund and Top 200 fund? Should I invest in both?
Jain: Both funds have a good record. Top is a predominantly large-cap fund, while the equity fund also invests in mid-caps within limits. Diversifying across both is a good idea.