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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See what other experts are saying about markets See what FIIs are saying about the markets See what Udayan Mukherjee is saying about the markets Nifty BSE | NSE 31/05/12 Are Mutual Funds betting on Nifty?

Q: By the same token, has it just been a pause or have you seen any kind of withdrawal of money from the retail traders who were saying that they don't want to take so many risks anymore?

A: No, we have not seen any major outflows in our funds atleast. It's more of market movements. Since the beginning of this year and till today, when I saw the numbers, it has been quite stable.

Q: What about the rest of the money that you run, which is non-Japanese. What are the key take-aways from that universe?

A: Very frankly, we only advise funds, which are managed out of Singapore, which gets money from Singapore and Japanese investors. Within DWS, we do manage a lot of money in emerging markets out of our Frankfurt office. I really can't comment much on that at this stage.

Q: For the money that you advise, does IT still remain your largest overweight sector in the light of the kind of numbers that you saw this quarter?

A: Yes, indeed. Right now, we are overweight on IT and slightly overweight on capital goods and that's the view that we share even for our domestic funds. For the near future, we don't see much of slowdown on construction and engineering activity. So capital goods, power equipment, engineering and cement will be our overweight sectors. Given the way the large IT companies have continued to show earnings growth and given the way margins are improving, and if indeed the developed markets like US slow down, I think there will be a lot more appetite for increasing IT expenditure and that's where Indian companies will benefit. So we are overweight on IT.

Q: Where do you stand on midcaps? You are largely in largecaps but for the last few days, midcaps have started coming back. What is your level of exposure there for your funds?

A: Our exposure to midcaps is low right now. It is predominately comprises largecaps and very selective midcaps in a few specific sectors.

Q: Have you taken any cash off the table? Are you largely invested in this rally back to 11,000 plus?

A: Right now, we are invested in about 5-8% cash in the domestic funds. In the Japanese funds, it is mandatory for us to stay invested all the time. Because one of the fund that we advise out of Japan has 10% in Japanese bonds. So that mirrors the cash equivalent.

Q: What is the sense that you get when you talk to investors in the region. Has the mood on emerging markets improved after the relative stability of the last few weeks?

A: Indeed, the mood has improved. I think India has been looked at slightly differently, given the strong earnings growth expected, even in the next few quarters. I think as far as India is concerned, people are a lot more bullish at this stage.