Mr. Nilesh Shetty |
In an interview with Capital Market, Nilesh Shetty, Associate Fund Manager-Equity, Quantum AMC said, Unless major path breaking reforms are announced, outperformance from current levels could be limited.
Excerpts:
1. Where do you see the equity markets heading from here and why?
Expectations are running high from the new government. Valuation of individual stocks is at cyclical highs while earnings are yet to reflect all the enthusiasm. Unless major path breaking reforms are announced, outperformance from current levels could be limited.
2. Which sectors you are considering attractive from investment Point of view and why and which sectors you are avoiding and why? What kind of stocks never enters your portfolio?
We remain overweight on utilities and consumer discretionary stocks largely due to either valuations are attractive or the price rise in these stocks have increased their weight in the portfolio. Consumer staples and healthcare are sectors we have no exposure to, because valuations are too rich. Stocks where we perceive corporate governance to be weak do not make it to our portfolio.
3. Kindly share your views on recently falling inflation? Is there possibility of inflation rising? Why? Is it time for RBI to reverse interest rate? If yes why/ If no why?
Rural wage inflation and rising crude prices were two main reasons for rising inflation in the country, with moderation in both these variables, inflation for the near term should be under check. If the fall in international crude price reverses, inflation could surge once again. Given RBI's primary focus of bringing inflation under control, I would be surprised if it lowers interest rates in the near term.
4. What would you like to advice to the investors in the current scenario? Looking at the rally in infrastructure funds, should one invest in them?
Given our perception of expensive valuations, lump sum investment is not advised at the moment. SIP investments remain the best route to avoid timing related issues in equity investing.
Infrastructure stocks look expensive at the moment, hence investing in infrastructure funds would mean elevated risks. However if the investment horizon is long term, then one can invest by way of SIP in infrastructure funds
5. Kindly share your investment strategy with us. Are you making any changes to your scheme's portfolio as we witness change in market?
Our style is bottom up stock specific investment and it's not linked to market levels. Given a lot of the individual stocks in our portfolio had turned expensive we had to sell our holdings, increasing cash levels in the fund. As and when we find value in individual stocks our cash levels will go down again.
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