Edelweiss Mutual Fund CEO Radhika Gupta has countered veteran fund manager S. Naren’s advice to exit the small and mid-cap segment, stating that a balanced approach with a long-term perspective is key to success. Naren had recently commented that small and mid-cap valuations were “absurd” and that investors should consider alternative options. Gupta took to social media to express her views, urging investors not to fall for fear mongering and instead focus on finding a good manager and holding on to investments for 10 years.
Gupta listed four key points for investors to consider: (1) a balanced portfolio with a mix of different asset classes, including mid and small caps, is essential; (2) returns from the top of the market cycle to the bottom may not be pleasant, but this is a normal part of the investment cycle; (3) liquidity is important, but can be managed; and (4) the key to making money is to hold on to Systematic Investment Plans (SIPs) for a long time, at least 10 years.
To support her argument, Gupta cited the performance of Edelweiss’ midcap fund, which has delivered a minimum return of 10% over rolling 10-year periods since its launch in 2007. She also noted that the fund has not delivered any negative returns over the past 10 years, with the minimum SIP return for the regular plan being 8%. Gupta concluded that these numbers are evidence that small and mid-cap investments can be a good option for investors with a long-term perspective.
Gupta’s comments are significant, as they offer a counterpoint to Naren’s views and provide reassurance to investors who may be considering exiting the small and mid-cap segment. By emphasizing the importance of a balanced approach and long-term perspective, Gupta is encouraging investors to take a more nuanced view of the market and not to make impulsive decisions based on short-term fluctuations. Overall, Gupta’s comments suggest that small and mid-cap investments can be a viable option for investors who are willing to take a long-term view and manage their risk effectively.