Paradigm Shift

Paradigms Change – They Never Disappoint

30000.00 100.00%

CAGR: 3.47% CAGR: 4.33% CAGR: 8.21% 80.00%

25000.00
60.00%
20000.00 Interest rates fall, consumer
boom 40.00%

15000.00 20.00%

0.00%
10000.00
-20.00%
5000.00 CAGR: 14%
Post War Recovery, Stagflation -40.00%
Depression, War

0.00 -60.00%

72 200 800 13,300 25,900

% Change Dow Jones

Fund Managers and their styles have the influence and carry the inspiration of the paradigms they come from. This is the major reason for
cyclicality of performance of many fund managers.

It takes at least journey through two paradigms for a fund manager to be a core fund manager.

This is the major reason the fund manager selection process has to be subject to various tests. The dependence and level of dependence on many of
them has to go through various other criteria. Return alone can’t guarantee survival.
1
Interest Rates in US

2
Paradigm Shift For India – Underrated
40000 120.00%
CAGR: 21.20% CAGR: 13.20%
35000 100.00%

80.00%
30000
60.00%
25000
40.00%
20000
20.00%
15000
0.00%
10000
-20.00%
Pre Economic Freedom Economic Freedom, Regulation, SEBI, Broadening of Economy
5000 -40.00%

0 -60.00%
1983
1984
1985

1991
1992

1998
1999
2000

2006
2007

2013
2014
2015
1980
1981
1982

1986
1987
1988
1989
1990

1993
1994
1995
1996
1997

2001
2002
2003
2004
2005

2008
2009
2010
2011
2012

2016
2017
2018
2019
150 1908 % Change Sensex 26,626 36,500

India is entering a whole new paradigm – Low Inflation, Low Interest Rates, Different Political and Social Ideology. Fund management community
usually is a pattern seeking community, lives with recency bias and change in paradigm could be numbing for many.
Our View – Some of the Underappreciated Macro Trends are Inflation Fall, Interest Rates Fall, Impact of Technology, Change of Behavioural Patterns,
Supply Exceeding Demand and Intra Sector Divergences. These scenarios are new to the whole world of fund management with no resemblance to
past trends

3
Interest Rate in India

4
Portfolio Vehicles - Suitability
Mutual Funds
• Process driven, tax and cost efficient
• SEBI recategorization has simplified fund selection
• Strategic as well as tactical allocation opportunities
• Best suited for passive strategy

PMS

• Customisation
• Well articulated and implemented thought process
• Clear categorisation – Value Vs Growth
• Fees in line with performance
• Track record

AIF
• Restricted to alternatives that cant be done through regular vehicles
• Net return to be better
• Correlation to be zero or low to indices and achieve diversification

5
Thank You
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