‘I’m In The Business Of Reducing Expectation. We Aren’t In 2008,’ Says ICICI Pru’s Nimesh Shah

“We are not in 2008. We are not in that world. Mark-to-Market of companies was then growing at 20-25 percent per annum. We are in a very different world (now),” the chief executive officer and managing director of ICICI Prudential AMC told BloombergQuint in an interview, adding that he’s in the business of reducing expectations of investors who still live in 2008.

On the other hand, mutual funds have evolved into a “pure product” in the Indian market, thanks to the Securities and Exchange Board of India and its policy tweaks, Shah said. “Over the last 10 years, since the 2008 crisis, every year, changes have been made. The product is getting better and better for the final customer.”

“I’m absolutely okay with the retired school teacher in Guwahati investing in any of our products,” he said.

ICICI Prudential Asset Management Company is the ninth-largest wealth manager in India, giving a 2.4 percent return in January 2020 and 7 percent so far this fiscal.

Shah’s Picks

For a newcomer to equity mutual funds, Shah suggests small-cap funds. “We have started recommending the ICICI small-cap fund six months ago...there’s a 52 percent divergence between large caps and small caps and we’re always looking for value in the market.”

Besides, he said, public sector companies are available at “dirt cheap” valuations—a “beautiful space to be in”.

The market, however, will come with its fair share of volatility, he said. “We aren’t seeing earnings-based growth, we are seeing flow-based growth. Flow in India is volatile,” he said, pointing out that between 2010 and 2013, India saw its market performance swing with the inflows.

He recommended investing in a balanced advantage fund to counter the volatility.