Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Money / Calculators/  It’s important for investors to invest globally as well
BackBack

It’s important for investors to invest globally as well

Invesco Asia-Pacific's Andrew Lo talks about building fund managerial synergies

Andrew Lo. Photo: Abhijit Bhatlekar/MintPremium
Andrew Lo. Photo: Abhijit Bhatlekar/Mint

Religare Invesco Asset Management Co. Ltd recently raised its net worth to fulfil the capital market regulator’s new requirements. Last week, Invesco Asia-Pacific’s senior managing director and chief executive officer, Andrew Lo, met Mint on his visit to India. Apart from building fund managerial synergies between the company’s Indian and international teams, Lo said he is keen to bring more international products to India.

Which Asian markets apart from India do you find attractive for your mutual fund (MF) business?

Asia-Pacific is the fastest growing economic region in the world. The second, third and fourth largest economies (China, India and Japan) in the world are here. Invesco began investing here in 1962. We have domestic MFs, offshore funds, institutional accounts, real estate, private equities and sub-advisory business with assets of $60.9 billion.

Do you plan to bring in more products to India, after the European and Global Income Equity Fund last year?

We will also look at bringing in products that invest in US and Asian equities. We have successfully distributed many global strategies to meet investor needs in Asia in various geographies.

The next 3-5 years, say market experts, are going to be good for Indian equities. Do you think it still makes sense to invest abroad?

It’s important for investors to look at this from an allocation and diversification point of view. Many financial advisers counsel investors to diversify their portfolio globally, to reduce risk and improve returns given the low correlation of returns between India and other global countries. We want to be a single-point investment solution provider of both Indian and global strategies, with long existing track records.

Investing domestically in India is definitely an attractive opportunity from a long-term perspective but investors will want to diversify a portion of their investments overseas to meet their needs such as saving for children’s overseas education, dollar returns (in case rupee depreciates), and others.

Is it too late for a first-time investor to invest in equities? What kind of products would you recommend for a first-time investor?

It’s never too late for the first-time investor, and long-term investors should periodically review their portfolio to ensure it will meet their retirement needs. Given the high inflation rates in India, allocation to equities is an important consideration for investors who want to create wealth over a longer period. But first-time investors should invest in a diversified India equity fund with a long-term track record. I suggest systematic investment plans as that is a prudent way to build their exposure to equities over time.

Equity markets in India are going up these days. The nation has been waiting for things to move, but is the retail investor expecting too much, too soon?

First, it is important that retail investors allocate a greater portion of investments to equity, which is still low (just 2-3%) in India and one of the lowest in the Asia-Pacific region too. Having a long-term approach to wealth creation by disciplined investments is better than not investing at all.

Equity investors in India and globally have welcomed the single-party mandate. Global investors are optimistic that the new government will deliver on growth and development.

On the flip side, India still has to address a lot of macroeconomic issues, which have been partly due to global reasons but a lot has been self-inflicted by local bureaucracy. How the new government brings about changes in its economic policies and guidance pertaining to growth and development issues will decide the future course of the market.

The change I see, compared with my last trip six months ago, is that there is renewed hope and willingness to act. Markets always tend to factor in these aspects ahead of time.

In the past five years, the Indian MF industry has seen many changes in business models. Have you tapered your expectations accordingly?

We see this as an opportunity. Invesco is an independent asset management firm—we are not a bank or an insurance firm—so there is no conflict of interest with other business lines.

What’s been satisfying over the past year in India is that even though some firms have left the business, we have launched our global products here. We have also made a lot of headway in retail distribution by getting on to the platforms of global and national distributors in India, adding people and opening offices in smaller cities.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 06 Jun 2014, 07:36 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App