Key takeaways
from S Naganath's speech at the Winvestor event in Mumbai on April 26, 2013.
· Go global: Take small tactical allocation in international funds, for e.g., in the range of 1% to 5% of your client's investment portfolio size. Though a small correction in US markets in the near term could take place, Naganath is bullish on America and Japan
· Rate cuts: Expects a 25 basis rate cut on May 3, 2013 and don’t expect further cuts this year from RBI. Inflation will remain high in the range of 7% to 8%. Investors to consider investing in short duration funds like dynamic bond funds, liquid plus funds. Keep liquidity handy instead of investing in long duration funds to buy equities at every dip if you have the risk appetite for equities
· Don't be frightened by volatility. Be very alert and agile to invest in equities as and when market provides an opportunity. Apart from a core portfolio, keep a tactical portfolio to book profits by revisiting the portfolio four to six times a year to take advantage of likely market volatility.
· India’s macro scenario: If America's oil import falls and if it manages to meet the demand internally oil prices will correct and it will help India's current account deficit. Once the animal spirit of corporates is unleashed and capital spending picks up, momentum will reflect this positively
· Sectoral outlook: Have some exposure to the banking sector in your portfolio and choose stocks depending on the valuations and financials. Pharma is an all-weather sector; stock specific approach is ideal. Capital goods, engineering stocks are beaten down. Infrastructure sector has not been in vogue for five years now and the sector may make a comeback once the economy rebounds. FMCG stocks look expensive and may not offer extraordinary returns in the near term
· Gold: Expects another correction in gold. Tactical allocation can be considered if prices decline sharply.
Disclaimer: The views expressed are as on 26th April 2013 and may change as subsequent conditions vary.
