Today, 15th July 2014, was a dream come true for me as I had the opportunity to meet Mr. Prashant Jain, one of the all-time best Mutual Fund Managers in India and currently the Executive Director and Chief Investment officer of HDFC Asset Management Company, at Park Sheraton, Chennai. Prashant is an IIT Engineer, IIM MBA, and a CFA and based out Mumbai, Mecca of Indian MF Industry.
For people who are not familiar with Mutual Fund Industry, he is someone like the Tendulkar of Cricket, Maradonna and Messi of Soccer, Federer of Tennis and Dr. Rajan and Dr. Manmohan Singh of Economics. Prashant Jain manages some of the largest Mutual Funds in India including HDFC Equity Fund, HDFC Top 200 and HDFC Prudence Fund, each of these are larger than the entire Assets Managed by many AMCs in India – There are over 1800 MF Schemes and over AMCs in India.
I have always recommended Prashant Jain’s fund to all my investors and personally have invested over 50% of my financial assets in the MFs managed by Mr. Jain.
Mr. Prashant has been managing these Funds – HDFC Equity, Top 200 and Prudence for over 15 years and generated immense wealth for lakhs and investors including me. The pedigree of these funds can be judged by the sheer size of these funds – HDFC Equity – 12,886/- Crores, Top 200 – 11,657/-, Prudence – 5,834/-, all figures as of 30th June 2014. HDFC Equity Fund has multiplied its original investor’s wealth 41 times since it was started in 1 Jan 1995 (Annualized returns of 20.99%); HDFC Top 200 Fund has multiplied 31 times since it was started in Sep 1996 (Annualized returns of 22.5%) and HDFC Prudence has multiplied 33 times since it was started in 1 Feb 1994 (Annualized returns of 20.38%) and Mr. Prashant Jain has been managing these funds for most of the duration – a rare and enviable record.
Mr. Prashant is a down to earth and amazing person and when I requested for his autograph, he said that he is feeling a little embarrassed as he is not a celebrity – I could relate his humility with Dr. Singh and Tendulkar who have a similar personality and this quality attracts more admirers.
I am summarizing some of the highlights of his presentation:
Indian Growth Story is solid as the inherent problems in the system are being addressed or have been fixed:
- Current Account Deficit (CAD) improving
- Oil Subsidies going down – expected to be 65,000 crores this financial year (FY ’15) and could move to Zero as the diesel subsidy is being pared
- Global Commodity prices – was increasing steadily and now stabilizing
- Rupee Stability with potential to appreciate by 3-5%
- Policy Paralysis situation is being addressed
- Minimum Support prices for agricultural crops being capped to less than 5% hike from 10% hike by the NDA government
- Encouraging Inflation Nos – Latest WPI of 5.5% and CPI of 7.5%
To keep it short, we are expecting a golden era in Indian Equity markets for the next 5 to 10 years.
The Indian Equity markets are fairly valued at a price earnings (PE) ratio of 15 at the current sensex level of 25,000/- and expected to double and reach 50,000 – in the next 5 years.
Returns from Indian Equity markets over long term will be directly proportional to GDP and CPI Inflation rate and expected to be in the range of 12-18%. The fund managers generate a good amount of alpha over the index returns and hence the returns from good funds should be easily 16% plus in the long run.
What is the recommendation for you as investors?
Asset allocation is the key and your funds that are not required for the next 5 years and above can be invested in Indian Equity Markets via good Mutual Funds. You should also have the appetite for the volatility that is inherent to Equity markets and should not panic if bears take control for some time. Stay away from Bank FDs and Gold as investments, if your objective is wealth generation as these assets can only at best help retain purchasing power and are not wealth generation products.
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<Blog #PenguWIN 1006 – Meeting with Mr. Prashant Jain, Globally acclaimed HDFC AMC Fund Manager>
Congratulations Sendhil on getting the opportunity to meet Mr. Prashant Jain. And thanks for the highlights from his presentation. Helps us laymen get the gist of the things.
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