As equity market volatility peaks amid rising geopolitical uncertainty and weakening macroeconomic indicators, retail mutual fund investors are once again confronting familiar questions around risk, returns and long-term wealth creation. Dipak Mondal spoke with Swarup Mohanty, chief executive officer of Mirae Asset Mutual Fund, on market conditions, investor behaviour, AI, gold and the evolving structure of India’s capital markets. Edited excerpts:
Given the recent volatility, does investing in large caps make more sense now?
Investing in large-caps always makes sense. In overheated markets, some investors may prefer passive strategies or simply buying the Nifty 50, but nobody disputes the importance of owning quality large-cap businesses.
After the recent correction, several strong companies are available at attractive valuations. Large-caps should continue to form the core of most portfolios.
India is entering a very interesting phase. Earlier, India became a $4 trillion economy while per capita income was still relatively low. Now the real story will unfold as per capita income rises from roughly $2,000 toward $3,000 and beyond. That transition changes consumption patterns, travel, spending behaviour and the broader economy. The beneficiaries of that growth will likely include several large, dominant companies.
Some fund managers have suggested investors should slow SIPs into small-cap funds. Do you agree?
No, we are not from that camp. Over the last few years, many new-age businesses have listed in the small-cap space, including companies in energy, asset management, hospitals, capital markets and consumer sectors.
Earlier, concerns around corporate governance were more common among smaller companies. But today, a generational shift is taking place. Many businesses that were once run conservatively by founders are now being managed by second-generation entrepreneurs who understand the value of public markets and corporate branding. As a result, several quality businesses are entering the listed universe.
If 250-300 companies are listing every year, investors only need to identify 10–20 good businesses over time to create wealth.
That said, investors should still follow asset allocation principles and understand their own risk profile. But many people discover their true risk appetite only after market corrections.
