Where to invest in India right now? Fund managers share investment

Given where the markets are, experts advise diversify into few less correlated asset classes in order to smoothly sail through any market condition. From stocks, real estate mutual funds to gold, fund managers’ investment ideas varied as they see plenty of opportunities and advised how should one approach to play it right with the current market conditions.

Big themes to track

While it is true that stock markets are at new highs and valuations are not compelling, but key drivers of stock prices are corporate earnings growth and liquidity. Both favour markets as corporate India is likely to report healthy earnings growth in the coming quarters, said Srinivas Ravuri, CIO Equity, PGIM India Mutual Fund.

This along with the financialization of savings and lower interest rates, can continue to drive up stock markets. Asset allocation is the most important part of financial planning. Our preferences are MFs, global, REITs, real estate, stocks, and gold in that order.

Trying to capture short-term market opportunities is very appealing but extremely difficult to execute. For example, buying good quality companies March 2020 crash should have been the easiest thing to do, but very few could actually do it, and even more frustrating is people actually selling their holding in April-June 2020 quarter hoping to buy them cheap later. So, best is to buy good quality MFs, REITs and stay invested.

Manufacturing and Consumption are two big themes to track. The government’s encouragement through PLIs and the need for additional sources to reduce dependence on China has created a favourable environment for the Indian manufacturing sector (Electronics, Chemicals, Pharma to name a few). Rising share of middle-class consumers would result in faster growth of consumer discretionary products, and technology would play a more prominent role, Ravuri added.

Asset allocation

Ashutosh Bhargava, Fund Manager and Head Equity Research of Nippon India MF said that given where the markets are, it’s better to diversify into few less correlated asset classes like equities, bonds and gold. That said, investors with at least 3 years or higher investment horizon must have very high proportion of equities in her portfolio as this has the best odds to give decent inflation adjusted returns.

From a shorter-term time frame, Bhargava advised asset allocation strategies like balance advantage funds or multi asset funds.

“If India must achieve its true potential, then credit to GDP must grow from less than 60% now to 100% over the next decade. Therefore, all kinds of financial intermediaries should be the key part of long-term investors portfolio,” he added.

Equities for the long-term

Chandraprakash Padiyar, senior fund manager, Tata Mutual Fund believes that on a long-term horizon (10 year+), Indian equities will continue to play a major role…