Nippon India Growth Fund’s performance chart put it at top quartile in the midcap funds space for all time periods from 6 months to 10 years – a commendable achievement for this iconic 29 year old wealth creator.
The fund has seen many fund managers with their own unique styles over these 29 years, but Rupesh says one thing that has remained constant is sharp focus on bottom up stock picking aided by superior in-house research.
Rupesh believes market valuations do appear high, but strong macros and micros continue to offer strong support.
Within midcaps, he expects some sector rotation as investors take profits in select industrials which have seen lot of exuberance and into consumer stocks where green shoots of demand recovery are now seen.
While the midcap benchmark is more industrials tilted, Rupesh has his largest positions in financials – in part because of valuation comfort and in part because of the diversity of opportunities this segment offers.
Power is another sector Rupesh is optimistic on – he sees many years ahead of sustained growth backed by robust and growing demand.
He is cautious on export focused companies as the global growth outlook continues to look uncertain.
The biggest risks he sees today is a market that’s priced to perfection (no room for negative growth surprises) and very high investor expectations fueled by recent returns. Disappointments on either count can pose bigger challenges than macro variables.