In an interview with ETMarkets, Chanda said: “We are still seeing a lot of interest in the popular names such as Apple, Amazon, Meta Platforms, and Alphabet (Google parent).” Edited excerpts:
Indian rupee has hit record lows vs. USD . How should Indian investors approach global investing amidst currency depreciation and macro challenges?
Global investing always comes with the additional effect from currency moves. The Rupee has been weakening against the US dollar over several years and this is a net benefit for domestic investors as their dollar investments gains from the Dollar’s appreciation.
The recent plunge in the rupee makes the global investment even more attractive to Indians. However, from an asset allocation perspective, it is vain to attempt the currency moves and one should rather stick to long-term allocation goals.
Any portfolio should have a meaningful diversification into global markets.
While tactical shifts to say energy, banks, and income-generating assets are okay at the margin — longer-term asset allocation goals should not be tampered due to macro events.
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In the current volatile times – what would be the risk strategies that you would suggest to investors?
We like to evaluate risk with respect to reward and all our investment recommendations take both factors into consideration.
For accredited investors, some attractive options are available in the current market environment.
A structured note which delivers a relatively high fixed coupon (compared to benchmark rates) and delivers the underlying asset if it trades below a pre-fixed strike price is one that uses volatility to its advantage.
These can be structured around either individual securities or even a basket of indices. Some of the long/short and alternate investments on our platform also play on volatility and are suitable for accredited investors.
For the retail investor, plain vanilla ETFs that offer exposure to broad market US indices are also attractive for investors seeking to build positions at market dips.
Talk to us about Thematic Kristals – what is the kind of various themes that is available on your platform for investors to invest in – which themes are you seeing attracting investor interest now?
Thematic Kristals are available across a variety of themes. There are Kristals that focus on style such as value, core, and growth, Kristals that offer exposure to specific areas of the market such as software, semiconductor, electric vehicles and batteries, water resources, energy, and Kristals that are alternative investment strategies such as global macro hedge funds, long/short strategies, and finally multi-asset Kristals that are developed in-house using our proprietary algorithm.
Given the current environment, we are seeing some investors switch into value strategies. Energy and commodities are also seeing increased traction. There also is interest in low-volatile alternate strategies on the platform.
How do you manage investor portfolios – is there AI that is also contributing to making portfolios of investors?
Client model portfolios have two components, one the asset allocation and the second is selection. Both involve the use of AI to a certain extent.
At the asset allocation level, our proprietary algorithm assigns weights to asset classes incorporating both our investment committee’s view on the markets and the output from a quantitative AI-driven process.
At the selection level, many of the instruments in the model portfolio are the top-ranked instruments that are derived from the output of a AI-driven algorithm.
We also offer KAIROs- quantitatively actively managed portfolios that are again managed using an AI-driven algorithm.
What is the growth outlook for Indian investors? Are there any new product launches in the pipeline?
Kristal.AI is bringing the best private equity and pre-IPO deals, which are hitherto not accessible to most. These are typically available for a million ticket size. But Kristal is fractionalizing them and offering them for as low as $50,000.
Share with us insights into how investors are investing on Kristal’s platform across stocks, ETFs, and other assets?
Across stocks, we are still seeing a lot of interest in the popular names such as Apple, Amazon, Meta Platforms, and Alphabet (Google parent).
Within ETFs, we are seeing investors get into energy, commodities, and consumer staples. Semi-conductors ETF is also seeing demand.
Among alternate asset classes, low volatility strategies are seeing increasing demand from accredited investors on the platform.
How can an investor manage the currency risk and country risk?
For the retail Indian investor, our portfolio baskets are diversified across asset classes and securities, thereby minimising specific country risk.
Given the nature of currency markets, we do not specifically target currency risk and the currency effect is a by-product of our asset allocation and security selection.
For the accredited Indian investor as well, our model portfolios are well diversified with additional access to PE funds, VC funds, hedge funds, etc that help reduce the overall volatility of the portfolio as these alternate asset classes have low-correlation with traditional assets such as stocks and bonds.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)