ETMarkets Fund Manager Talk: This portfolio manager recommends focussing on domestic-oriented cos amid global volatility

At a time when growth challenges prevail in developed economies and interest rates remain high, focussing on domestic-focussed companies will be an ideal strategy, says Amit Doshi, WealthBasket Curator and director of Care PMS.

“In such an environment, highly valued stocks generally get hit because high growth expectations get built in and interest rates were lower when those valuations were assigned. So, one should avoid such businesses,” Doshi told ETMarkets in an interview. Edited excerpts:


Over the last 1 year, how has your WealthBasket performed against the benchmark?
The 1 year return has been volatile and our fund has underperformed a bit compared to the benchmark. We have been in the industry for more than a decade and we believe that over a longer period the returns have to be measured and we are confident of outperforming the benchmark.

In times of volatility, what should be the ideal investment strategy? Would you recommend multi-asset allocation?
Not only in times of volatility, even otherwise, clients should follow asset allocation, where your investments are bifurcated in risk-free and risk-based investments.

It’s not possible to give a standard answer to this as it will totally vary person-to-person. But broadly, the funds that you believe is not attached to any of your goal (buying a house/ say for kids education etc.), after putting aside emergency funds, should classify in two baskets -risk-free and risk-based.

Once you have enough comfort that you have risk-free assets (may be a 2 year living expenses) and the funds that you don’t need for another 3-5 years; those funds can be considered for deploying into equities.

Have you seen any major change in the retail investors’ behaviour in the recent volatile market conditions?
Yes, it happens that when equity does not give returns for a year or so and on the other hand with interest rate hikes, the risk-free return is quite decent, then the retail investor does become a bit impatient and shift funds towards fixed income instruments. So a similar thing is happening even this time. But broadly, what I am seeing is that people are becoming more aware about financials and are still doing better compared to earlier similar situations.
Have you increased your cash holdings in the recent months?
We already had some cash lying in the last few months. We have started deploying them now.

At the current juncture, which stocks/sectors look best bets, while which sectors would be an avoid?
Considering major weakness in the global macros and high interest rate scenario, domestic-focussed business with less impact in demand products (non-discretionary product companies) with decent valuations should do good.

In such an environment, highly valued stocks generally get hit because high growth expectations get built in and interest rates were lower when those valuations were assigned. So, one should avoid such businesses.

We have seen that both SEBI and exchanges have been cautioning investors on fraud and dubious practices on investment advisory by some entities. What is your read through and how should retail investors handle such instances?
Yes, in this era where there is abundant information online and a lot of ‘finance influencers’ on social media platforms, please use your own decision and judgement and invest only with people whom you trust. I think trust should be one big criteria and fees and performances can be secondary while selecting the advisors.

If a retail investor today has Rs 5 lakh, how should one deploy this money?
While there is a bit of uncertainty, broader markets have already seen a good correction ranging between 20-40%, so, one should invest in a staggered manner in 2-3 instalments.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)

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