What kind of returns should equity investors expect this year?
This year will be more volatile for equity investments and will depend on how the Union budget, monsoons, etc, pan out. Given the current valuations, returns will be relatively muted.
Many equity investors missed out when the markets rebounded in 2009. What is your advice to such investors?
Equity investment is all about partnering with the entrepreneur in the business. Every business has a gestation period and goes through highs and lows. However, a good business with sound principles will eventually create wealth. So, it is necessary to give time to the business to grow and perform well. Our advice is to invest in equities with a long-term view and to do so systematically.
Which factors should taxpayers keep in mind while investing in ELSS funds?
At the macro level, investors need to analyse qualitative factors like the fund house's background, disclosure norms followed by the company, and the track record of the fund manager. At the fund level, check the quality of the portfolio and whether the fund's mandate is in line with your risk appetite and investment objectives. While performance is an important benchmark, emphasis should be on consistency.
Sankaran Naren is CIO, Equity, ICICI Prudential AMC