Investments should be diversified across assets, says Nimesh Shah of ICICI Prudential Mutual Fund

Shah continued: "Concentration risk on the asset side and concentration risk on the liability side also — so first thing well diversify your instrument. There are clear Sebi (the Securities and Exchange Board of India) guidelines about how much we can put in one asset. What is the other problem so like people have understood that you should not take too much exposure on concentrated asset side but another important area for investor to look at is are the liabilities concentrated. A well-diversified fund house would have people from all across the country into it, from all segments of the society and will not have chunky investors. What we try and see that in a credit risk fund you don’t have big institutional investors, you have various small investors across the country so that ensures to that extent your assets don’t get eroded.”

“Advance against shares is the business that we as an AMC have been doing since a long period of time. I have not had a single negative experience still now in advance against shares. I believe even in Zee one has to see as you are saying that Zee is the exposure, yes is there an issue today, yes we had an issue in JSPL also. There was never a single day delay for us in JSPL but headlines were all over we have to worry about not only resolving a case, we don’t get that time because when issues happen in India since it is not a liquid market we don’t have a junk bond market. Even if I want to sell today I can not sell," said Shah.