Listen to this article
Sensex surged past the 70,000-level for the first time on Dec 11 and Nifty crossed the 21,000-mark as the equity market continued with its bullish momentum. Cafemutual spoke to Alok Agarwal, Head Quant and Fund Manager, Alchemy Capital Management, Ashutosh Bhargava, Fund Manager and Head Equity Research, Nippon India Mutual Fund, Christy Mathai, Fund Manager, Equity, Quantum MF and Hardick Bora, Co-Head of Equity, Union MF to get their views on the current market conditions and what to do during these market conditions.
Let's hear it from them.
Alok Agarwal, Head Quant & Portfolio Manager, Alchemy Capital Management
Alok says that India is in a goldilocks era with good growth and high corporate earnings which gives hope about the market in both long and short term. He says, “We are hopeful about equity as an asset class. Sectors which we bet on during this time are auto, capital goods, defence, railway and real estate.” Alok suggests that there is no point in timing the market as missing out could be a bigger loss. He also suggests MFDs should not overpay for growth stocks if valuations are stretched.
Ashutosh Bhargava, Fund Manager and Head Equity Research, Nippon India MF
Ashutosh says at a time when there is a high level of exuberance in the market, it's very important to not to lose sight of investors' asset allocation goals. While the market may deliver superior medium-term returns, investors may have undue high return expectations from the market even in the near term. He says, “Setting the right expectations and not letting investors deviate from their stated asset allocation plans are key challenges for our MFD partners. “He adds that promising sectors include banks, utilities, auto & auto ancillary companies and pharma; one needs to be cautious while investing in global pricing dependent segments like metals and chemicals.
Christy Mathai, Fund Manager, Equity, Quantum MF
Christy is of the opinion that at all points in time, an MFD or RIA should focus on asset allocation with the right mix of equity, gold, and debt according to investors' risk appetite. He says, “It is recommended to do lump-sum investments only when valuation is attractive; current valuations across market cap are ahead of historical medians. Within equity, we recommend any investor’s core equity allocation should be a fairly liquid portfolio more inclined towards large cap with value bias and further incremental allocation can be towards growth/mid and small-cap depending on investor risk appetite and time horizon.”
Hardick Bora, Co- Head of Equity, Union MF
Hardick says that MFDs can go for large cap if the investor is looking for a lump sum investment. He says, “Flexicap and large & mid-caps are the preferred fund categories in equity. Also, small caps shouldn’t be ignored and one can look to stay invested in them for a duration of next 6 to 12 months.” He also says that with India's growing economy, the coming time is likely to be positive for the equity markets and it is expected to outperform all the other asset classes in both near and long term. He says, “Equity is likely to generate alpha in the current market conditions and so the portfolios can be kept equity heavy. In sectors, power, capital goods, infrastructure and PSU banks are some sectors to bet on.”
