Sunil Subramaniam, Managing Director of Sundaram Mutual Fund, said that he would call Systematic Investment Plan (SIP) as a “Savings EMI,” during a recent interview.
Sundaram MF’s MD Subramaniam expressed his views on questions related to SIPs, midcap correction, market reaction to 2019 elections, and the Sundaram AMC’s expected earnings growth for FY19, during an interview with The Economic Times.
SIP is consistent and is the best option to hit market volatility, said Subramaniam.
“Buy low, sell high is a mantra to make money in the markets,” he added.
SIP offers the best power of compounding, further added Subramaniam. He also suggested saving on a monthly basis through SIP when we get monthly income.
“I would call SIP a savings EMI,” said the Sundaram MF’s MD.
SIPs have been hitting a record high last month. However, the Managing Director of Sundaram Mutual Fund feels that the trend might not continue. Subramaniam feels that the Systematic Investment Plans have gone from 6,000 to 7,500, during the period when the market has been volatile.
He also added that many mature investors understand that SIPs are the best option to profit from volatility rather than being scared of volatility and running away.
The risky mid and small-caps are seeing outflows, while large-caps are seeing inflows. He said that this is overdone. From December 2018 until now, the correction in the midcap index was seen at a 35 percent premium to the Sensex. While now, it is at a 6 percent premium and that indicates a correction close to a 30 percent.
Regarding market reaction to 2019 elections, he feels that the market would reach all-time highs with the approach of the election, once clarity is achieved, reported The Economic Times.
Regarding the earnings growth that the AMC is expecting for FY19, Subramaniam said that Sundaram Mutual Fund is expecting about 25 percent to 28 percent on the small-cap side, 23 percent to 25 percent on the midcap side, and 17 percent to 19 percent on the large-cap side, in the next two year-three year CAGR (Compound annual growth rate) in earnings.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]