Mutual Fund Investment Benefits; Edelweiss CEO Radhika Gupta | Stock Market | Mutual fund is a scam, investment bubble is being formed in it: Radhika Gupta said – very irresponsible people saying this, read full interview

With the increasing trust of people towards mutual funds, some people on social media claim that mutual funds are a scam and an investment bubble is being created in it.

On this, Radhika Gupta, Managing Director and CEO of Edelweiss Mutual Fund, says that those saying this are very irresponsible people, who are making such allegations on a regulated industry.

Along with this, Radhika Gupta talked about investing in mutual funds, its concept, fund selection and the risks associated with it and other things. Read the full interview…

1. Question: Mutual funds are right, how right is it? answer: This is 100% correct. Today you get coffee for Rs 100, but you can invest with this amount. You can invest to suit every risk profile with a wide range of product choices. After redeeming the funds, you can get the money in 2 days. You cannot do this in any financial instrument. There is transparency along with regulation.

2. Question: There is a lot of ups and downs in the market right now, in such a situation, what should investors who have made big investments simultaneously and SIP in mutual funds do? answer: The market goes up as well as down. After Covid, people have only seen the market going up. People should know that investment is a journey of 5 to 10 years. I say the same for good markets as well as bad markets that investment should be as simple as pulses and rice.

Invest in things that make sense to you and are appropriate for your risk appetite. If you invest money in the Indian economy through mutual funds for 10 years, you will make money. There will be ups and downs in the market, it is your job to bear them.

Radhika Gupta said that do not stop your SIP, because when we go to buy a saree and get it at half the price, we become very happy. When you invest in mutual funds through SIP and get cheaper, then you should be happy.

3. Question: I want to know about the concept of mutual fund, how does it work? answer: A mutual fund is a pool in which many people invest together, in which they give their money to professionals. He manages their money and if there is a fund of Rs 100 and you invest Rs 50 and I invest Rs 20, then accordingly you get a gain of Rs 50 and you get a gain of Rs 20. There are a lot of regulations in this.

4. Question: Which parameters should a common investor look at while selecting the right mutual fund? answer: 1) What does a mutual fund invest in? In big stocks, in small stocks, in mid stocks. 2) How one invests and when it does good and when it does bad. 3) How much return can it give in the long run and how much does it fall. 4) Who manages that mutual fund?

5. Question: Where should investors buy mutual funds? Is it right to buy mutual funds through a distributor? How much is the impact on returns? answer: I think if you need financial planning or advice then definitely get it from a qualified distributor. I think 90% of people need help. If you understand, there are many direct platforms, Asset Management Company (AMC) websites and many Fintech platforms. Can take it from there.

People always say that there is a fee for purchasing from distributors. He said that when you go to a doctor, you pay a fee. Similarly, when you go to a lawyer, you pay fees. If you think someone’s advice is good, there are many distributors who give very good advice. You should use their advice. I promise that the difference of 1%-1.15% will be more than beneficial in advice.

6. Question: What are the risks associated with investing in mutual funds and how can investors reduce them? answer: If you are investing in equity mutual funds then the biggest risk is market risk. The market goes up, the market goes down. At the same time, if you take sector based funds then there is more risk. For example, if you take a fund from IT sector, it will have risks related to IT companies.

The way to reduce equity risk is time. The longer the time goes on, the risk will reduce. Along with this, Radhika Gupta said that the way to reduce sector specific and stock specific risks is simple. You should invest in things which are diversified. Also at what time are you investing? If you are buying a very expensive thing at a very expensive time then the risk increases.

7. Question: What common strategies do mutual fund managers adopt to achieve investment objectives? answer: Mutual fund managers try to identify good companies in the market, whose return on equity is higher than the cost of capital. Those which have good management and are available at reasonable prices.

8. Question: What are the common mistakes investors make while investing in mutual funds and how can they avoid them?

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9. Question: How do you see the future of actively managed mutual funds with the increasing popularity of index funds and ETFs? answer: I don’t see it as any threat. I say there are a lot of different products in our industry. Active funds are doing very well. We run very good active funds. For those who want a simple solution where they don’t have to choose, there are passive funds, index funds and ETFs. Do use them, people in the country go to Domino’s to eat pizza and also go to very fine dining Italian restaurants.

10. Question: Some people make videos on social media saying that there is an investment bubble going on in mutual funds. What is your opinion on this? answer: These are not experts who are saying this. I have not seen such a video, I have heard that some people are saying that mutual funds are a scam, a bubble. Those who say this are very irresponsible people who are making such allegations against a regulated industry. I don’t understand on what basis they are saying this. Till date, I have not seen a reel in which any such argument is found which is true. I think it is very irresponsible that people make such videos for their own benefit.

11. Question: What should be the minimum and maximum number of mutual funds in an investor’s portfolio? answer: Usually many people work in 5 to 10 mutual funds. Some people even have 200-300, then you have the entire market.

12. Question: If you invest 100% of your money in the equity market, how risky can it be? answer: No one should keep their entire investment in equities, asset allocation is very important. I say portfolio like dal rice, but you don’t just eat dal rice. Roti is also eaten with it, because it is a balanced diet. Similarly, there is a balanced asset allocation, so equity, debt and gold should also be included in your investment.

13. Question: This dal chawal reel of yours became very viral, I want to know about it in detail? answer: Yes, this concept is very popular. I did not become the brand ambassador of the pulses and rice company, this is what is left. Food is such a thing that everyone in the country understands well. I believe that the things that are good in life are also good in investing. I was trying to explain investing in a simple way.

Dal and rice are nationalized, if you are in North then the kind of dal and rice made there will be made there. Going south, lentils and rice become rasam and rice. Along with this, it runs in the entire country including Madhya Pradesh and Gujarat.

14. Question: If we talk about low salary people, what is the minimum investment they should make? Suppose someone’s salary is Rs 30 thousand per month? answer: One should try to invest at least 10% of the salary after tax. If you can’t do this then I say do something and do it through SIP. With this, investing will become your habit.

15. Question: Is the scope of mutual funds only in cities or is it reaching villages also? answer: Mutual funds are reaching villages also. It has reached thousands of pin codes of Tier-1, Tier-2, Tier-3 and Tier-4, but it still has a long way to go. It has not yet reached the cities completely. Many people know what SIP is, but they have not started.