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Aditya Birla Sun Life AMC Limited

Aditya Birla Sun Life AMC Limited

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    All season financial mantras

    Transcript

    Dec 30, 2022
    4 Mins Read
    A. Balasubramanian

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    For anybody who enjoyed the ride of easy liquidity led rally in 2020 and 2021, may have had a different experience in 2023 thus far Inflation. Interest rate hikes, market volatility, have kept market participants on the watch. While every year there are new opportunities and trends, there are a few investment mantras that are for all seasons and years.


    1. Big fish first


    Identify which are the big ticket spends planned – part payment of a loan, buying an asset, a marriage in the family, etc. Are your current SIPs sufficient or you need prior planning to have a goal-based approach? Do you need to step-up your SIPs (increasing the SIP amount)? Ensure you have listed down the key priorities in the coming years, be aware of those, and start planning your investments in advance. It always helps to tick off the big items first so that they don’t magnify in future. Prioritisation of expenses is an essential step in your financial planning. To quote the Art of War "Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win". In this sentence Sun Tzu points out the importance of planning and preparation. In one’s financial journey, this kind of meticulous planning based on one’s resources, expenditure, goals, is absolutely critical.


    2. Make friends with asset allocation


    Take a multi-asset approach for your portfolio construction. When you invest across multiple asset classes that do not tend to react to the same factors in a similar way, and are not correlated, you make the most of diversification. In the new year, ensure your investments are well diversified – both from an asset class point of view, as well market capitalisation. Don’t put all your eggs in one basket is a famous adage we have all heard before. Diversification is akin to this. The experience of putting all your eggs in one basket is usually never fruitful, because if the basket drops all the eggs are spoilt. Hence, diversify. Asset classes have their cycles, hence diversifying and allocating investment money across different assets helps to cushion against the bottom cycle of any one asset class.


    3. Build an emergency fund


    If the pandemic has taught us anything, then it is about the fact that life is full of uncertainties. We all are afraid of uncertainties but never plan for them. An emergency fund is what one must consider to manage any unforeseen expenses that can appear. If you don’t have one, start one immediately. After parking earnings for your monthly investments, keep a portion to keep it in short term fixed income schemes such as an ultra-short-term fund or a liquid fund. A Liquid Mutual Fund is a debt fund which invests in fixed-income instruments like commercial paper, government securities, treasury bills, etc. with a maturity of up to 91 days. They have a graded exit load upto six days and no exit load from 7th day. Many AMCs, including ours, allow for insta redemption facility. Liquid funds ensure your savings are not sitting idle in your account. Especially in the current environment of high interest rate, make use of the opportunity.


    4. The power of patience and consistency


    Wealth creation is a journey that demands investment discipline, patience and consistency. A famous English actor once said, “Life is like the rungs on a ladder. The reason they are placed so close together is that we can learn to take baby steps and reach our destinations safely.” Your SIPs (Systematic Investment Plans) are like those baby steps to help you reach your financial destination. Hence in the coming new year, make a resolution to stick to your goals, invest with patience, and keep a disciplined approach in charting your financial roadmap.


    Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

    A. Balasubramanian

    About Author

    Mr. A. Balasubramanian is the Managing Director & CEO of Aditya Birla Sun Life AMC Limited. A stalwart of the mutual fund industry, he brings with him over three decades of rich experience.

    He has been associated with the organisation since 1994. Prior to assuming the role of the CEO in 2009, Mr. Balasubramanian served as Chief Investment Officer from 2006 to 2009. As Managing Director & CEO, Mr. Balasubramanian oversees Rs. 3 lakh crore in Assets Under Management at Aditya Birla Sun Life AMC. Before joining ABSLAMC in the year 1994, he worked with GIC Mutual Fund, Can Bank Financial Services and Pandit & Co. between 1989 and 1994.

    Mr. Balasubramanian has been awarded CEO of the Year title by Asia Asset Management in 2018 and 2020. He has been awarded Chairman’s Individual Award by The Aditya Birla group for being an Outstanding Leader in 2015 and for being a Leader of Leaders in 2018.

    Mr. Balasubramanian is closely associated with key industry bodies. He has been on the board of AMFI (Association of Mutual Funds in India) since 2009 and was the Vice Chairman of AMFI in 2015-2016. He has served as the Chairman of AMFI for two terms, from 2016-2018, and reappointed for the period of 2021 – 2023. He is also the ex-officio Chairman of AMFI’s Financial Literacy Committee. Mr. Balasubramanian is also an esteemed member of the Fund Management Advisory Committee of the International Financial Services Centres Authority (IFSCA). The committee will be advising IFSCA in laying down a long-term plan for the orderly growth and development of the fund management industry in IFSC. He is also a Governor on the Board of Governors of the National Institute of Securities Markets (NISM), and member of the advisory committee of the SEBI Investor Protection and Education Fund (IPEF).

    He has completed advanced management programs from Indian Institute of Management, Bangalore and Harvard Business School. He also holds a bachelor’s degree in science (mathematics) and a master’s degree in business administration from GlobalNxt University.

    Mr. Balasubramanian is involved with philanthropic work through various charitable organisations. He is actively engaged in initiatives towards Mother & Child healthcare and supporting Indian Art & Culture. He is one of the active members at Sathya Sai Sanjeevani Centre for Child Heart Care. He is also associated with Sathya Sai University, Gulbarga that imparts knowledge on Human Excellence to students during their higher education. He promotes Indian Arts and Village Traditional Culture by being a Trustee at Melattur Bhagavata Mela Foundation.

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