Mr. Rajnish Rastogi has 13 years of experience in the Financial Services Industry. He has earlier worked as Investment Manager at Alliance Bernstein LLP (NYSE: AB) where he helped the firm make investment decisions for technology, telecom and healthcare sectors for its Strategic Value Fund ( USD 80 Bn) and Advance Value Hedge Fund (USD 800 mn). His last role was as Director- Investments at HSBC Private Equity Advisors (India) Pvt Ltd., Mumbai. In addition, he has held various positions in organizations such as IL&FS Investment Managers Ltd and CRISIL Research.

Investment policy – FII, FDI policies on various sectors and GAAR issues

Economic growth  - steps that can be taken by RBI and Central Government to help boost growth

Government expenditure especially mix movement from subsidies to investment and better targeting of subsidies.

b) Global factors

Economic stability – resolution of economic issues in various European Union members

Economic recovery in US and consequent stance of US Federal Reserve

Movement of global commodity prices especially oil, coke and ores as India is energy deficient and mineral deficient economy

2. What are your views on the near term growth of the economy?

Ans. Growth seems to be bottoming out. Economic recovery is expected to be a phased one with CY13 being an year of consolidation and CY14 showing positive momentum

3. Since gold prices are falling on international as well as the domestic front, what is your outlook for Gold?

Ans. Gold consumption in India is expected to moderate especially in light of recent duty imposition by the government of India and decline in gold prices. However, the key issue is lack of good inflation hedged investment opportunities in the financial markets as equities are bottoming out and have given poor returns over the last 5 years and interest rates being lower than CPI inflation.

4. India has received good inflow from FIIs last year. Do you think India will continue to receive such inflows? In your opinion is the market overly dependent on such inflows?

Ans. Indian markets have historically had high correlation with FII flows. Further, high current account deficit requires high level of portfolio investments to keep the BoP under control and reduce risk of rupee depreciation.  As of now given high levels of CAD, low level of participation by Indian retail in equity markets, reasonable redemptions from insurance products, the dependence on foreign inflows is expected to remain high

5. Which sectors are you bullish/bearish on for the rest of the year?

Ans. Sectors we are bullish on are

a) Pharmaceuticals, b) Information Technology, c) Cement, d) Oil marketing and gas distribution, e) Financial services

 Sectors we are neutral on are

a) FMCG, b) Oil exploration, c) Power transmission, d) Construction and capital equipment, e) Banks

Sectors we are bearish on are

a) Real Estate, b) Automotives - Two wheelers and commercial vehicles, c) Metals – ferrous and non-ferrous

6. How are your funds positioned in the current market conditions? What is your advice to the investors?

Ans. I currently manage passive equity funds (exchange traded funds) and therefore the individual funds are mirroring their respective indices and not dependent on the market conditions

Investors should look at diversifying their investments across asset categories like long term and short term debt, Indian equities (large cap and mid cap) and international equities along with commodities. This will help them get better risk adjusted returns over the long run.

7. Could you throw some light on the structure of your research team?

Ans. The team is structured as an executor of index funds with heavy focus on trading and database support for the fund manager.