Mr. Trideep Bhattacharya

CIO - Equities, Edelweiss Asset Management Limited

With PGDM in Finance from SP Jain Institute of Management & Research, Mumbai and B.Tech in Electrical Engineering from IIT, Kharagpur, meet our CIO - Equities - Mr. Triddep Bhattacharya.

Trideep comes with over two decades of experience in Equity investing across Indian and Global markets. Prior to joining Edeleweiss AMC, he was instrumental in builiding a market leading PMS business at Axis Asset Management Company, as Senior Portfolio Manager – Alternate Equities.

He has also spent a significant amount of time as a Portfolio Manager at State Street Global Advisor and UBS Asset Management (London, UK). When not occupied with work, Trideep loves playing Tennis, Bridge and is hands on with few musical instruments.

1. With the markets getting back their mojo after four-months, small and mid-cap shares raced ahead of large caps in April. Can investors change their minds? What is your outlook for the rest of the calendar year 2023 (CY2023)?

Ans: Our overarching theme for the equity markets in 2023 revolves around "Recession Before Rebound". Our expectation is that during the first three to six months of CY23, we will witness the economic consequences resulting from the interest rate hikes implemented by major economies in CY22. However, as we progress through this period, which is likely to occur around the second or third quarter of the calendar year, we anticipate that global economies will reach their lowest point and start to show signs of an economic rebound in the second half of 2023 and the first half of 2024.

In line with this perspective, as we approach the second half of CY23, several key factors are expected to act as triggers for the equity markets. These factors include the peak of interest rates, the stabilization of global growth, and a reduction in geopolitical tensions on a global scale. Additionally, we anticipate that inflation will remain persistent, leading to a gradual reduction rather than an abrupt change.

Lastly, we would like to highlight that the valuation discrepancy between large-cap and mid/small-cap stocks has now realigned to historical averages. Consequently, the mid/small-cap space has become an attractive destination for stock-picking, offering opportunities for wealth creation.

2. What are the new challenges that, in your opinion, will steer the equity markets moving forward?

Ans: Our assessment indicates that the equity markets may encounter new challenges going forward. These challenges may include persistent inflation, resulting in prolonged periods of high interest rates, a severe and destructive El Nino event, and the insolvency of a globally significant bank and finally, less than favorable outcome in national elections in 2024.

3. How have your schemes performed in FY23?

Ans: Overall, I would like to describe FY23 as a year of strong alpha cross our long-only funds. We also, note that amongst all strategies, our mid-cap strategy had a particularly strong finish to FY23 with an alpha of about 200bps on YTD basis.

As we implement our "FAIR" investment philosophy into action, we view FY23 as a year of favorable outcome and continue to invest time and action in following the process diligently.

4. What is your strategy for consumption-related plays? 

Ans: We are currently underweight consumption-related plays in our portfolio, as we feel that consumption is current witnessing the negative impact of high inflation, while rural consumption could get impacted by a potential severe EL Nino wave ahead. However, we continue to evaluate opportunities on a case-by-case basis.

5. Inflows in the mutual fund industry through SIPs reached Rs 1.56 lakh crore in 2022-23, up 25 per cent from the preceding fiscal year. Which category/categories have seen the most growth in terms of investment? Does the investor decision prove to be in line with the expected trend? Express your opinion.

Ans: SIPs remain a popular choice for numerous new investors looking to enter the mutual fund market. The study by CAMS found that over 60% of millennials began their mutual fund investments through SIPs. The growth of SIPs has been particularly strong in Midcap, Smallcap, and Flexicap Funds among various equity funds. Despite market volatility, investors have maintained their confidence in SIPs, and this trend appears to be increasing. It seems that investors have learned the value of patience in the game of SIP and equity investing, which is a positive development. Overall, this trend is expected to continue and strengthen in the future.

6. Metaverse centric funds are launched across the USA, Asian and European countries. What is your opinion about the development of these funds in the future for generating returns for Indian investors? Will investors be able adapt to the risk/reward from such funds if launched in India? 

Ans: Investing in such funds can provide Indian investors with exposure to companies involved in the development of metaverse-related technologies, virtual reality, augmented reality, blockchain, and other relevant sectors. These investments have the potential to generate returns, especially if the metaverse continues to evolve and gain mainstream adoption.

However, it's important to note that investing in metaverse-centric funds, like any investment, carries risks. The metaverse is a relatively new and rapidly evolving concept, and its future trajectory and commercial success are uncertain. Additionally, investing in emerging technologies and sectors typically involves higher levels of risk compared to more established investment options.

In summary, while metaverse-centric funds hold the potential for generating returns for Indian investors, it is important for investors to carefully assess the risks, conduct due diligence, and make informed investment decisions based on their individual circumstances and investment objectives. Consulting with a financial advisor or professional can provide personalized guidance in this regard.

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