Interview - Sunil Subramaniam MD, Sundaram AMC

With its very intensive research-driven, bottom-up stock-picking approach guided by growth at a reasonable price (GARP) principle, Sundaram Asset Management Company has always adopted a consistent overarching sector view. In this interview, Managing Director Sunil Subramaniam elaborates about the company’s performance in a sluggish market and its overall vision about future growth

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How has been the response to your recently launched NFO? Do you see investors still willing to invest in the equity market in general and NFO in particular?

The response to the NFO has been very positive since we collected ₹358 crores from over 30,000 investors despite very volatile market conditions. This response and the monthly equity net cash numbers for the industry rising month-on-month indicate that investors are sustaining their faith in equity mutual funds.

Credit events such as IL&FS, Essel Group, and DHFL had adversely impacted the debt mutual funds, specifically, the credit risk funds and FMPs. The latest AMFI data shows an outflow of ₹2,269 crores from the credit risk fund. What is your perspective on this event?

The losses suffered by retail investors in debt funds has come as a big shock to them as they had invested in these funds as FD substitutes – hence, the outflows. But this has been a big learning curve for the industry and for investors and over time this is a healthy thing as erroneous purchasing of these products will come down and there will be better alignment between the interests of investors and that of fund managers.

What has been the reason for abandoning the side pocket? Do you think the regulator should be more flexible in allowing fund houses to do side-pocketing? Don’t you think this will allow some opportunist investors to gain at the expense of other investors?