S&P BSE Sensex soared over 279 points today to close at an all-time high of 36,545 points. A minor correction in crude oil prices, gains in energy and financial sectors helped the rise in markets.
We spoke to a few fund managers to understand what to expect in near term and what strategy investors should adopt.
Jinesh Gopani Head – Equity, Axis MF expects the volatility in equity markets to continue. “Our equity market outlook is still cautious. Global trade wars, FII outflow, uncertain oil prices are key contributors to volatility. In the current market, we are following multicap strategy. However, we are taking an extremely selective approach to stock selection in the small and midcap space.”
In the near term, Jinesh recommends large cap funds for equity investors as large cap stocks are a safer bet in uncertain markets. “In my view, investors with a slightly longer-term horizon of 5 years should consider investing in multicaps as these funds could generate alpha once the macro economic factors stabilise.”
Navneet Munot, CIO SBI MF feels that the markets will remain range bound in the near term. “Today’s rally was fuelled by strong performance in sectors like IT, oil and domestic liquidity and not any structural changes. In such a scenario, equity investors should consider investing in multicap funds as they allow fund managers the flexibility to capture opportunities across different market segments.”
Pankaj Tibrewal, Sr. Vice President & Fund Manager (Equity), Kotak MF mentions that though Sensex has touched lifetime high level, other market indices continue to remain range bound. “The uncertainty surrounding currency movement, oil prices and politics is influencing the market movement. In this scenario, we believe that sticking to good quality companies and strictly adhering to your investment process can help generate wealth.”
He further added that investors should take systematic approach to investing through SIP or STP route to limit the impact of market movement on their investment. Investors having a long-term investment horizon of 3-5 years can take a small exposure to mid and small cap space as these stocks are likely to grow in future.
Seconding Navneet and Pankaj, Viral Berawala CIO Essel Finance MF said, “Sensex levels were mainly driven by 8-10 stocks, which delivered earnings above market expectations. In the current scenario of global, macro-economic and political uncertainty, we continue to hold to our large cap bias. While opportunities have emerged in mid and small cap space post the correction, they still continue to be expensive compared to historical average.”
Viral feels that investors should consider investing systematically in hybrid or multicap funds based on their risk profile.
