Mr. Harshad Borawake

Head of Research & Fund Manager - Equity, Mirae Asset Mutual Fund

Mr. Harshad Borawake joined Mirae Asset Mutual Fund in December 2016 as the Head of Research. Along with strengthening the overall research and investment processes, his core coverage sectors include Financials, Oil & Gas and Economy.

He has an overall professional experience of more than 19 years across industries like Financials, Oil & Gas, Logistics and Aviation. Prior to joining Mirae Asset, he was with Motilal Oswal Securities as Vice President (Research) and Capmetrics & Risk Solutions as Research Analyst - Equity. Mr. Borawake is a Bachelor in Engineering and has done MBA in Finance.

Mr. Borawake manages Mirae Asset Aggressive Hybrid Fund, Mirae Asset Balanced Advantage Fund, Mirae Asset Equity Savings Fund & Mirae Asset Multi Asset Allocation Fund.

Q1. The current geopolitical and trade developments-including the recent 50% tariff by the U.S. on Indian imports, and talk of broader tariffs on sectors like pharma-have added a layer of uncertainty. How should Indian investors interpret these global headwinds while continuing their long-term equity investment plans?

Ans: The tariff issue is very fluid and given that negotiations are underway, we have not seen the end of it. Nevertheless, India’s exposure in terms of goods exports to US is ~2% and hence not that meaningful. Indian economy is largely inward looking economy and investors should focus more on the corporate earnings growth. After dismal sub 2% growth for Nifty 50 in Fy25, earnings revival is expected in FY26 led by tax incentives, RBI infused liquidity, good monsoon, festive season and base effect. Given the valuations, investors should temper down the return expectation in the near term, while continue to remain invested from medium to long term perspective and growth levers for Indian earnings continue to remain strong.

Q2. On the domestic front, we’ve seen persistent FII outflows despite relatively strong macro fundamentals. What are the key factors driving this trend, and should retail investors be concerned-or see this as a contrarian signal?

Ans: FII inflow and outflows are driven by multiple factors including relative valuations of India and other competing economies. With the strong domestic flows now led by SIPs the impact of FII flows now impacts relatively less than few years back. Investors should focus more on corporate earnings growth and valuations than these factors.

Q3. With market valuations varying across segments, where do you see better risk-adjusted opportunities for SIP investors today-large caps, midcaps, or small caps?

Ans: It is better to take a basket approach with large part 60-65% towards large cap and the rest in mid and small cap.

Q4. For investors considering momentum or factor-based strategies, what performance metrics beyond historical returns should they closely monitor?

Ans: Any Factor investing will expose you to the risk of cyclicity. Rather than relying solely on single factors, we recommend combining momentum or any other factor with contrasting factor as part of your portfolio. While evaluating any factor, key is to understand the methodology of the factor investment, looking not only return and risk but also focusing on rolling return specially percentage of periods the strategy outperforms its benchmark, showing persistence. Downside deviation and Sortino Ratio and Information Ratio will also be key along with Upside and downside capture ratio. Evaluate factor investing from long-term investment horizon and framework i.e. at least 5 Yr + is critical. Lastly, suitability of each factor investment based on risk and return framework of individual client is essentially. For example, for you can give momentum from large mid universe and give momentum from Mid Small universe as well.

Q5. A widely cited and persistent concern among investors is the challenge active funds face in consistently outperforming their benchmarks, especially after fees. How do you address this common perception, and what specific characteristics of your investment philosophy or process do you believe give your fund a sustainable edge to generate alpha over the long term?

Ans: Perform in the near term can be volatile, but over the long term, history suggests that the median performance of the active funds is relatively better than the benchmark performance. The basic tenets for a sound portfolio include bottom up stock piking based on fundamentals, management quality and valuations along with barbell approach wherein we have combination of growth as well as value names. Out philosophy is centered around buying good quality business upto a reasonable valuation, backed by strong management and holding them for the long term. Also, while all the stocks come from a bottom up stock picking process, we also keep cognizance of the benchmark while building the portfolios.

Q6. Could you please provide your analysis of the Q1 earnings season and outline your expectations for Q2, specifically highlighting how you are factoring in the current global macroeconomic tailwinds?

Ans: This earnings season has been marginally better than expected on the headline numbers are concerned with numbers coming marginally ahead of estimates. (on back of Construction materials, financials, metals & minings, Autos). As said earlier, we expect consumption piece in the economy to review in the 2H and from the Q2 results perspective, we would more watch out for management commentary than the actual results to get sense on the overall earning revival trajectory.

Note: Views provided above are based on information in the public domain and subject to change. Investors are requested to consult their mutual fund distributor for any investment decisions.

MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY

Please note we have published the answers as it is received from the Fund Manager of Mirae Asset.

Mr. Mahendra Kumar Jajoo

Chief Investment Officer - Fixed Income, Mirae Asset Mutual Fund

Mr. Mahendra Kumar Jajoo is responsible for managing fixed income assets across all products. He has over 31 years of experience in the field of financial services including 17 years of experience in Fixed Income funds management.

He is overall responsible for supervising all Debt schemes of the Mirae Asset Investment Managers (India) Private Limited.

In his prior assignment, he has been associated with organizations like Pramerica Asset Managers Pvt. Ltd., Tata Asset Management Ltd., ABN AMRO Asset Management Ltd and ICICI Group.

Mr. Jajoo manages Mirae Asset Aggressive Hybrid Fund, Mirae Asset Balanced Advantage Fund, Mirae Asset Equity Savings Fund & Mirae Asset Nifty SDL Jun 2028 Index Fund.

Q1. The RBI has kept the repo rate unchanged, as widely expected, even as inflation projections have softened and global uncertainties-like new tariff threats and evolving Fed policy-persist. How do you interpret the central bank’s stance, and what signals should investors be watching from both the RBI and the US Fed in the months ahead?

Ans: RBI indicates that the current fall in inflation is already factored in it front loaded 50bps rate cut in June. While domestic factors suggest scope for incremental rate cuts in India, the global factors are somewhat uncertain.

Fed is also concerned with tariff related inflation and steeper yield curve with dwindling demand for US treasuries.

Investors may watch for any change in stance on these issues by the respective banks.

Q2. Beyond the RBI's policy, what are the key domestic and global macroeconomic trends that you believe are currently shaping the Indian bond markets? Where do you see the most significant tailwinds and headwinds?

Ans: Dwindling demand for US govt bonds is the most significant headwind for now for Indian bonds, not allowing further fall. RBI has already frontloaded rate cuts and has injected massive liquidity in the system recently. Further, domestic macro remains supportive for lower rates providing tailwinds.

Q3. How do you define your investment philosophy as a fund manager, and how has your strategy evolved over the past 12–18 months?

Ans: At Mirae, FMs keep analyzing the evolving scenario on a continuous basis and construct portfolio in line with the expected market outlook and the fund’s investment objectives. If the rates outlook is positive, FMs would likely be overweight and vice-versa. The strategy has worked well and is inherently dynamic.

Q4. What role can target maturity funds (TMFs) play in an investor’s portfolio today, especially in light of expected stability or mild downward movement in rates?

Ans: TMFs is a product, closest to an FD but with very significant additional advantage for the investors. It offers for all practical purposes a free put option to the investors. That’s to say, if the market is adverse, the investor can hold the investments like any other FD/FMP without much fear of any terminal capital loss. However, if the market is favorable, investor may cash out capital gains at a time of his choosing.

Q5. Geopolitical tensions globally have often pushed investors toward the safety of bonds. Are you seeing any such shift in sentiment or flows toward Indian fixed income assets?

Ans: At the moment, markets seem to price in the confidence that the ongoing geopolitical tensions would dissolve eventually without much negative impact. At this point, one has not seen any defensive shift towards fixed income

Q6. In the current environment of macro uncertainty, what broad investment strategy would you advise for debt mutual fund investors-especially those in low- to moderate-risk profiles?

Ans: Follow an accrual-oriented strategy for now. The best time for duration strategy has just crossed behind. Money market curve is relatively steep offering options in the low duration and money market category

Note: Views provided above are based on information in the public domain and subject to change. Investors are requested to consult their mutual fund distributor for any investment decisions.

MUTUAL FUND INVESTMENTS ARE SUBJECT TO MARKET RISKS, READ ALL SCHEME RELATED DOCUMENTS CAREFULLY

Please note we have published the answers as it is received from the Fund Manager of Mirae Asset.

Mr. Devang Shah

Head – Fixed Income India, Axis Mutual Fund

Devang Shah is the Head of Fixed Income at Axis AMC. He joined the fund house in 2012 as a Fund Manager and was elevated to the position of Head – Fixed Income in 2024.

He has over two decades of industry experience of which, 18 years have been spent in the Mutual Fund industry. His core responsibilities include managing top quartile performance for all Fixed Income Funds & managing client relationship. Additionally, he has been actively involved in ideation and determining the investment strategy for fixed income funds.

Prior to joining Axis AMC, he was associated with ICICI Prudential AMC (2008-2012) as a Fund Manager and was also the head of credit. He has also worked with Deutsche AMC and PwC.

Educational Qualification: B.Com from Mumbai University and a Gold Medallist in Financial Management, Associate Member of ICAI

Q1. Given rising global uncertainty-from the Israel-Iran tensions to the ongoing Russia-Ukraine war-how should fixed income investors position themselves to manage risks around global inflation, volatile oil prices, and shifts in safe-haven flows?

Ans: Geopolitical conflicts have been on the rise in the last few years. The unfortunate part is one cannot control these external risks. This is where investors can diversify their asset allocation and participate in fixed income funds. The start of the rate cycle proved beneficial for long duration funds. However, I believe now is the time to participate in short term funds and these can outperform long bonds from risk risk-reward perspective due to a shallow rate cut cycle, lower OMO purchases in the second half of the year and a shift in focus to Govt Debt to GDP targets.

Q2. With the RBI’s recent 50 bps rate cut, how do you interpret the central bank’s message to the market? Do you see this move as a pre-emptive easing to support growth, and how might it reshape fixed income strategies going forward?

Ans: The 50 bps repo rate cut was larger than expected but the change in stance to neutral and the CRR cut was a surprise for the markets. The central bank has been proactively managing liquidity and had already announced measures so there were no expectations on this front from the policy. I had been of the view that this current cycle would be shallow and that’s exactly how the cycle played out. The central bank is definitely prioritising growth while inflation is well under control. As indicated in most of our communication pieces, a significant part of the bond market rally is behind us and there would be limited rate cuts and that too if we see weaker growth. Rates will stay lower for longer. I expect macro indicators like GDP, CPI to remain soft for FY26. Consequently, there is nothing that can lead to significant upside in yields. I expect 1-5-year corporate bonds to rally and outperform long bonds on a risk reward perspective.

Q3. The RBI has recently discontinued daily Variable Rate Repo (VRR) auctions in light of a ₹3 lakh crore liquidity surplus. How do you interpret this move, and what does it signal about the RBI’s evolving liquidity stance and its potential impact on short-term rates?

Ans: The central bank had introduced daily VRR auctions on January 16, 2025, to address temporary liquidity tightness caused by tax-related outflows and foreign exchange interventions. However, with liquidity conditions now easing, the RBI is shifting its focus to stabilising overnight money market rates, which have been trending lower due to excess funds in the system.

We believe that these daily VRR are not the need of the hour and there is enough liquidity in the system.

Q4. India’s 10-year benchmark yield is currently around 6.31% as of July 15th. How are you positioning your portfolio across the curve in this environment? Are there specific segments-short, medium, or long-that offer better value at current levels?

Ans: After the larger-than-expected repo rate cut, shift to neutral stance from accommodative and unexpected CRR cut, markets remain in neutral. Liquidity remains abundant and we do not anticipate further cuts in the next 3-6 months. Analyzing macro data, lower GDP, softer CPI, lower for longer rates and abundant liquidity, we expect 1-5-year corporate bonds to rally and outperform long bonds on a risk reward perspective and foresee a limited rally in government bonds going forward. In fact we have shifted our allocation from higher government bonds to higher corporate bonds.

Q5. The RBI has revised its inflation projection from 4% to 3.7%. In your view, does it create room for more policy easing in the coming quarters?

Ans: As against the central banks inflation projection, headline inflation is already at 2.1% and I do not expect it to remain lower at this level for long. I believe that the RBI has frontloaded the interest rate cuts for this cycle; rates will remain low, and liquidity will remain abundant. While inflation projection for Q1CY26 is above 4%, we believe that unless we see big growth shocks there will be limited room for easing.

Q6. In your opinion, what could be the key triggers that might lead the RBI to consider another rate cut in the near term?

Ans: As mentioned earlier, I do not foresee further rate cuts in this year. However if the RBI was to cut rates it would be on account of a large slowdown in growth.

Note: Views provided above are based on information in the public domain and subject to change. Investors are requested to consult their mutual fund distributor for any investment decisions.

Please note we have published the answers as it is received from the Fund Manager of Axis.