Bazaar & Beyond: Long-Term Investing, NPS & Why Chasing Returns Can Be Costly

Vivek Ananth: Hello everyone, and welcome to another episode of Bazaar & Beyond.

Today, we have with us Ramneek Kundra, CIO DSP Pension Funds. Ramneek is known for his value-investing approach, long-term investing philosophy, and focus on building portfolios through discipline, patience, and rigorous research.

In this episode, we discuss market uncertainty, retirement planning, NPS, global diversification, FII flows, and why investors should focus on frameworks instead of chasing returns.

Ramneek, thank you for joining us.

Ramneek Kundra on His Journey into Investing

Vivek Ananth: Let's begin with your journey. How did you enter the world of investing, and what led you to become a fund manager?

Ramneek Kundra: I studied marketing at New York University and initially had nothing to do with finance.

During my time in New York, I worked at a startup that was part of the Disney Startup Accelerator. When the company was preparing to raise capital, nobody knew how to build a financial model. That pushed me to learn valuation and financial modelling through Professor Aswath Damodaran’s work.

That experience sparked my interest in investing. Over time, I started reading extensively, investing my own money, writing investment theses publicly on social media, and sharing my thought process around businesses.

Eventually, that passion led me into professional fund management. I joined Taurus Mutual Fund in 2022 and later moved to DSP Pension Funds.

Investing in an Uncertain World

Vivek Ananth: Investors today are dealing with higher interest rates, geopolitical tensions, crude oil volatility, and global uncertainty. How should they think about the future?

Ramneek Kundra: The first question to ask is whether we ever really knew what the future would look like.

Ten years ago, nobody knew how markets would evolve. Nobody predicted the concentration in US markets, the rise of certain sectors, or major geopolitical events.

The reality is that nobody knows what the next five or ten years will look like.

What investors can do is follow a process, stay disciplined, and focus on a long-term framework rather than trying to predict outcomes.

Humans adapt remarkably well to uncertainty. Markets adapt too.

Why Investors Should Stop Chasing Alpha

Vivek Ananth: Investors often switch to the latest top-performing fund or manager. Why do you believe this can be counterproductive?

Ramneek Kundra: Because investors are usually chasing past performance.

When a fund has already delivered exceptional returns, the alpha has already been created. By the time most investors notice it, they are effectively chasing historical performance.

The focus should be on understanding a manager’s philosophy, framework, and process rather than simply looking at recent returns.

Performance can fluctuate, but a robust investment framework tends to endure across cycles.

The Importance of Investment Frameworks

Vivek Ananth: How should investors evaluate fund managers beyond returns?

Ramneek Kundra: Investors should focus on the framework.

There is no secret formula in investing. Most principles are publicly available through investors like Warren Buffett.

The challenge is consistently applying those principles.

Value investing, at its core, is about buying something for significantly less than what it is worth.

A good investor understands business quality, earnings potential, cash flows, risks, and valuation not just popular narratives.

FII Selling vs Domestic Flows

Vivek Ananth: There is a lot of discussion around FIIs selling while domestic investors continue investing through SIPs. How do you interpret this?

Ramneek Kundra: It's important to understand that FIIs and domestic investors operate with different objectives and time horizons.

Over the last few years, many international markets have outperformed India in dollar terms.

FIIs allocate capital globally and compare opportunities across countries. Domestic investors, on the other hand, continue investing through SIPs and long-term savings programmers.

Both can be right depending on the timeframe being considered.

Investing debates often happen because people are discussing different time horizons.

Why NPS Deserves More Attention

Vivek Ananth: You manage pension assets. Why do you think more investors should consider NPS?

Ramneek Kundra: The biggest advantage of NPS is taxation.

The tax benefits themselves create a significant source of alpha.

Even if investment returns are similar to other products, the tax efficiency of NPS can substantially improve long-term outcomes.

For retirement planning, tax-free compounding over decades can make a meaningful difference.

Equity Allocation for Retirement

Vivek Ananth: How should younger investors think about equity allocation within NPS?

Ramneek Kundra: For investors with a long investment horizon, higher equity allocation generally makes sense.

Personally, I am 37 years old and keep the maximum permissible 75% allocation in equities within my NPS portfolio.

The remaining allocation is in government bonds.

If someone has 15–20 years or more until retirement, a higher equity allocation can help capture long-term growth opportunities.

Global Diversification Matters

Vivek Ananth: Many Indian investors prefer to invest only in domestic markets. Do you think that's enough?

Ramneek Kundra: Home-country bias exists everywhere.

American investors are heavily invested in US markets. European investors tend to favour their own regions.

However, investors should consider diversifying internationally.

I believe having 30–40% exposure outside India can improve diversification.

That doesn't mean only investing in the US. Investors can look across different geographies depending on valuations and opportunities.

Diversification provides access to opportunities that may not be available within a single market.

Managing Anxiety During Market Volatility

Vivek Ananth: Many investors become anxious during volatile periods. How should they deal with uncertainty?

Ramneek Kundra: Personally, I maintain cash in my portfolio because I am naturally conservative. But the larger lesson is not about cash levels—it is about consistency. Investors spend a lot of time debating what to buy and sell. What matters more is sticking with a sensible strategy over time. If you have selected a good fund or a sound investment approach, remain committed to it rather than constantly searching for the next opportunity.

SIPs and Long-Term Wealth Creation

Vivek Ananth: What role do SIPs play in long-term investing?

Ramneek Kundra: SIPs remain one of the most effective ways to build wealth.

They encourage discipline, reduce the impact of timing decisions, and help investors stay invested through market cycles.

The biggest advantage of SIPs is behavioural they make consistency easier.

Book Recommendations

Vivek Ananth: Any books that have influenced your thinking and that you would recommend to our audience?

Ramneek Kundra: A few books that had a significant impact on me are:

• The Intelligent Investor – Benjamin Graham
• One Up On Wall Street – Peter Lynch
• The Warren Buffett Way – Robert Hagstrom
• Zero to One  Peter Thiel

These books provide valuable perspectives on investing, business, and long-term thinking.

Closing Thoughts

Vivek Ananth: Thank you so much, Ramneek, for joining us and sharing your insights.

Ramneek Kundra: Thank you for having me.

Vivek Ananth: And to our viewers, uncertainty will always be a part of investing.

Rather than trying to predict every market move, focus on building a disciplined process, staying invested for the long term, and aligning your portfolio with your financial goals.

Until next time, stay informed and invest wisely.

Disclaimer: Investments in securities markets are subject to market risks. Please read all related documents carefully before investing.