Viraj Gandhi, the CEO of Samco Mutual Fund, shared his insights on various sectors and market dynamics. Here are the key takeaways:
- Market Outlook: Gandhi anticipates volatility leading up to the US elections but expects markets to rally once there’s clarity on the election results. He believes that the market is already pricing in much of the current uncertainty, and once resolved, an upward rally may follow.
- IT Sector: Gandhi remains cautiously optimistic about the IT sector. The recent rate cut cycle could take time to show full effects, but current valuations have accounted for future expectations. However, decision-making in the sector may slow down until after the US elections, given its potential long-term impact on business.
- Defense Sector: He highlighted the sector’s growth, supported by the Indian government’s push for indigenization. Despite high valuations, he sees the defense space as a long-term growth story, underpinned by domestic demand and potential future exports.
- BFSI Sector: Although credit demand remains strong, the banking sector faces a deposit crunch. Gandhi emphasized the high credit-deposit ratio, which could pressure net interest margins if the situation persists. Despite short-term challenges, he holds a cautiously optimistic long-term view.
- Mutual Fund Trends: Gandhi noted the structural shift in Indian retail investors toward a long-term approach, driven by better education and awareness. He believes this shift could result in monthly equity inflows reaching ₹1 lakh crore soon.
- Multicap Fund Strategy: Samco’s new multicap fund employs a “4-in-1” strategy that dynamically rebalances portfolios across large, mid, small, and even smaller caps beyond the Nifty 500 index, depending on market conditions. This approach aims for superior risk-adjusted returns by hedging during downtrends and shifting to debt when needed.
The message is that investors should brace for short-term volatility but remain focused on long-term opportunities across sectors.
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