On the back of a process driven turnaround of equity performance that now has 80% of ITI MF’s equity funds in top quartile, the fund house has launched its Large & Midcap Fund with a promise to adopt the same bottom up focused stock picking approach across sectors and market cap segments.
The initial portfolio is likely to have 40% allocation to large caps, 40% to midcaps and 20% to small caps, as the fund house continues to find bottom up opportunities across all cap sizes even as headline valuations in mid and small caps are higher than large caps.
The fund will have 3 types of stocks: 40% will be allocated to consistent compounders, 40% to growth stocks and 20% to emerging themes.
Within BFSI, Vishal will focus more on niche NBFCs and PSU banks rather than the big private sector banks.
He is positive on consumer discretionary as well as staples. He says staples companies are seeing encouraging signals of demand revival from rural India.
While valuations are elevated, one has to perhaps recognize that Indian valuations may continue to trade at a premium to global benchmarks given our superior growth prospects and strong domestic flows.
Geo-political risks cannot be discounted and potential for supply delays and dislocations are high. Best to invest in strong businesses that can pass on to customers any cost increases that result from supply issues.