Equities require regular investment

Krishna Kumar Karwa is promoter, co-founder and managing director of Emkay Global Financial Services, a broking firm that specialises in institutional broking and equity research.

A rank holder from the Institute of Chartered Accountants of India (ICAI), Karwa has navigated all aspects of the equity markets over the last 28 years. He now leads the research, portfolio management services and corporate advisory divisions at Emkay.

Karwa co-founded Emkay Global in 1995 and has been its MD since October 1, 2010. He was also the chief financial officer of Emkay Global between October 2010 and May 2017.

Karwa heads Emkay’s equity research, which covers 260 companies and 17 sectors with the help of 34 research analysts. He is known for identifying mid-tier companies early on, which helps clients enjoy strong returns in the long run. Emkay is also well-known for its bespoke research, conducted in tune with the client’s research requirements.

Bespoke research includes studying historical performance of an individual stock, projecting its future results and uncovering unknown facts about popular stocks that hold the key to winning investment decisions.

 

Investment strategy

He advises regular investment in stocks, without trying to time the market. He believes the return potential of small and mid-cap stocks are much more than the large-cap stocks in the long run if identified early. At the same time, small and mid-cap stocks suffer the most when headwinds emerges in the economy or the equity market, since such companies have a relatively higher risk profile and weaker balance sheet.

Last month, he launched the Emkay Emerging Stars Fund, a Sebi-approved category III Alternative Investment Fund (AIF). The five-year close ended fund aims to deliver superior returns by investing in small-cap and mid-cap stocks that count among the top 300 to 1,000 companies by market capitalisation.

From retail investors’ perspective, Karwa feels, “A retail investor’s equity exposure should be based on asset allocation, risk appetite and most importantly, on what stage of life he\she is in.” “Those who do not understand equities should invest either via mutual funds or opt for portfolio management services, where professionals manage the portfolio and one simply monitors the investments,” says Karwa. “Both new and existing investors should invest regularly in equities in small tranches rather than in lump sum.”