Massive de-leveraging and credit crunch driven by the US and spreading to Europe has led to widespread selling across asset classes including equities with bigger selling in real estate & commodities. The selling is aggravated by redemption pressures driven by the fear about economic slowdown and collateral damages seen elsewhere. Coordinated policy action by central banks and governments across the globe is aimed at providing stability to financial markets more specifically the credit markets and improve the business environment. Closer home, Indian economy is largely driven by domestic consumption (67% of GDP) and infrastructure creation and is expected to be more resilient than other emerging economies. While the tighter monetary conditions prevailing currently would moderate growth in the near term, economy is expected to do well over medium to long-term as RBI moves to easing mode. The macro economic environment & the growth would be supported by declining commodity prices and peaking out of interest rates would further help. It is therefore reasonable to expect India's growth to sustain over a longer period. Equity market valuations have compressed significantly and present a very attractive investment opportunity and equity as an asset class will continue to give better returns than any other asset class in the medium to longer term. Focus of the fund is to capitalize on the investment opportunities in the economy with long-term perspective. The investors in this fund should look to invest with a minimum of 3 years horizon, hence investment of the fund is made in companies which can create greater performance over longer period of time. The fund focuses on a bottom up style of investing. |
