Mr. Harshad Patwardhan, Edelweiss MF
With education from IIT/IIM, CFA charter and 25 years of industry experience, meet our CIO Equities – Mr. Harshad Patwardhan.
Harshad was the CIO Equities at JPMorgan Asset Management for over a decade and continued as the CIO Equities of Edelweiss Asset Management after the schemes changed hands in the year 2016. He’s responsible for long only equity mutual funds at Edelweiss Asset Management Limited.
Q. What is your take on the RBI the downward reduction in the FY2020 GDP forecast from 6.9% to 6.1%? How of much will have an impact on the India growth story?
Answer: In our view the downward reduction in the GDP forecast from 6.9% to 6.1% is the recognition of the reality and doesn’t come as a surprise.
Q. What are the major triggers or red-flags in the economic fundamentals that you are cautious about and why? Do you find any silver lining.
Answer: Most of the negatives have been out in the open for quite some time. Of course there could be new negatives that might emerge.
The silver lining is that both the RBI and GOI have started the effort to arrest and hopefully reverse the vicious circle. The effect of the same will be seen with a lag.
Q. How do you see corporate tax-rate cut impacting the earnings growth for companies in medium to long term. How will impact the equity markets going forward?
Answer: While the corporate tax-rate cut is unequivocally positive, the earnings growth and the positive impact on companies will have to be seen in case-to-case basis. In fact, a few companies might continue with the old rate for some time. The move is definitely positive and the impact will be seen in medium to long term.
Q. We hear of a lot of sectors complaining of slowdown and lack of demand. Which are the sectors that looks promising /attractive to you in the present markets?
Answer: During significant deceleration, most sectors will get impacted by the slowdown and subsequent lack of demand. Sentiments will return to normalcy once markets starts performing. The sectors which we’re bullish on are speciality chemicals, capital goods and financials.
Q. Is there any change made in the investment strategy /process to suit the challenges posed by the market conditions? How are you identifying buy and sell opportunities in the present markets?
Answer: Currently Mid and small cap are offering attractive valuations and there are many stocks in the mid and small cap sector which offers high risk-reward opportunity. In fact our emphasis is to find such scrips and capitalise on the opportunity.
Q. What would be your advice to retail investors wanting to create wealth and wishing to invest in equities today? What return expectations can they expect for over say 5-7 years?
Answer: Our advice to retail investors wanting to create wealth and wishing to invest in equities today is to start a SIP/STP in small and midcap funds as the suitable way to create wealth in the medium term. As far as return expectations are concerned, it would not be right to comment anything since nobody can predict the market high and lows. The bottom line is stay invested!
Disclaimer: Mr. Harshad Patwardhan is the CIO - Equity of Edelweiss Asset Management Limited (EAML) and the views expressed above are his own.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.