VKR: Vetri, from a sectoral perspective, any hidden gems? Hype-free industries?
Vetri: We think emerging areas of consumer spending—travel, tourism, education, healthcare etc.—are interesting areas. As people earn more this is where spending increases. But unfortunately it is not free of hype, i.e. the stocks are not particularly cheap and you have to take a very long-term perspective.
Simran: Why would I trust a new fund house like yours?
Vetri: We have several funds with a 2-3-year track record and they speak for themselves in terms of track record. The team is experienced and investment processes are well organized.
Also See | Behind the NAV, Basics, Returns and Risk Measures (Graphics)
Sarah: Are you under-diversified with 50 stocks in your portfolio?
Vetri: We think 50 stocks is a very comfortable number for a diversified portfolio. There is enough statistical evidence to the effect that beyond 25-30 stocks, the incremental diversification starts coming down. What becomes more important are issue such as sector biases, market cap biases etc.
Murali: Hi Vetri, how do you see global cues impacting indian stock market sentiment?
Vetri: We live in a global world. Our companies are going global and many of them are exposed to the ebb and flow of global trade and markets are affected by capital flows and global sentiment. This is inescapable, but over time, market reflects economic realities and that is why India is up 2.5 times from its high in 2000 whereas the US is down 30% from its high in 2000. Unfortunately in the shorter term, we are not really decoupled.