In May, equity mutual fund redemption hit 8-month high of over Rs 3,500 crore. Is the party over for equity funds?
While heavy redemptions did take place, it may be noted that at the same time during the month of May 2013, FII net equity purchases in cash market have been to the extent of Rs 20,680 crore. During the month of May Nifty Index touched a high of 6199.95 and it is a natural reaction by the investors to book profit at such a level. 

Weaker rupee and CAD continue to weigh on economic recovery. What’s your outlook for markets going forward?

With the weakening price of gold and the stable oil prices the current account deficit will be contained and will not stay at the elevated level of above 6.50%.  With the likely hike of cap in FDI and stable commodity prices, current account deficit is expected to come down.

Which are the sectors you are bullish on?

Banks, pharmaceuticals, oil and gas are some of the sectors where we have a positive view.

Do you believe the India growth story has lost its steam?

It is expected to pick momentum and it has not lost its steam. 

What do you advise the existing mutual fund investors to do now? Should they hold or exit?

I would advise existing mutual fund investors to stay invested as all current prices have factored most of the negatives. 

What should investors sitting on the fence should do — should they start investing in equity funds or continue to wait?

The current valuations are very attractive and investing at this level may reward investors in the long run. 

Do you believe there are traits that differentiate between an excellent and an average fund manager?

Each one may be having different trait and the performance may depend on market conditions and the view they take, which is influenced by the personal traits.