00:00Valuations has been more correct in the Indian market and we should see that ideally it should be an attractive
00:07market, but in the comparison of emerging markets, there is also a premium in Indian share market.
00:13And there is a big reason behind FII's, because the other emerging markets are a little attractive. Major reasons, one
00:22reason we are going to say.
00:23Now, after valuations are correct, analysts and experts are saying that for sustained re-rating, foreign inflows and earnings momentum,
00:35what do you want to do with the earnings momentum, what do you want to do with the earnings momentum,
00:40and what do you want to do with FII inflows?
00:42What do you want to do with the earnings growth?
00:44So earnings growth, as I had asked before, that investment is different, but what will determine the value of the
00:52market is the earnings growth and the revenue that the companies are generating.
00:56It is not possible for a market to sustain without profits and without generating revenue and without generating earnings growth.
01:04Last quarter, a lot of sectors like consumer discretionary, healthcare, they all showed good positive returns.
01:12But there were some sectors which struggled, like for example, there was financials, just a little issue.
01:18So there have been different sectors, but sectors like consumer discretionary, etc. showed very, very healthy returns.
01:23So this is now the result season which is going on. As of now, as of now, it's not a
01:28bad season at all.
01:29As of now, things are looking good. But we will have to see, I think it's going to be a
01:34selective market.
01:35I cannot, I cannot, I can, you cannot say ki large caps may invest karo, small caps may invest karo,
01:40mid caps may invest karo.
01:41Correction ho goya hai, bahut sara jo hai valuation correct ho gaya, even in small and mid cap space.
01:47But within that also, you can have companies jis ka jo hai, PE is very high.
01:51So the point I'm making here is that I think it's going to be a selective market.
01:56It's going to be a choosy market. Aapko select karna padega in terms of what is the, which market cap
02:02you should go for,
02:02which are the companies which are giving good earnings growth. That is where a good research team comes in handy.
02:07And I think that is the first step that earnings growth are more important than anything else.
02:12Last quarter was good. This quarter we are going through it. We'll have to see how it pans out.
02:17Especially with crude prices, especially with rupee going through its own depreciation.
02:21We'll have to see what are the kind of results that are going to come.
02:23But India is generally over, is a developing market.
02:30If you are able to have that patience to invest and stay invested,
02:34Highly likelihood of returns is there in a market like India.
02:37Because there is a lot of infrastructure development that is happening.
02:40Lot of consumption that is growing.
02:43So India will go through its ups and downs.
02:45The only two sectors that we feel are a little off are probably IT and real estate.
02:50But every other sector, we believe that earnings growth will continue to be robust.
02:53Now your second question is on emerging markets.
02:56Yes.
02:58And coincidentally, VITO has an emerging markets fund and an emerging markets ex-India fund.
03:04These two funds are with us.
03:07Emerging markets which includes India has outperformed emerging markets which does not include India.
03:13So we have a fund which has removed India's sleeve.
03:16And a fund which has kept all emerging markets.
03:19So that's what I am comparing that an emerging markets basket which includes India has outperformed an emerging markets basket
03:25without India.
03:27Because, so that is one.
03:29Biggest pressure has come because of crude oil prices and rupee.
03:32Right?
03:33That has been the biggest pressure that has happened in Indian markets.
03:35It will continue to happen.
03:36That is why interest rates are going up.
03:38And interest rates are going up globally.
03:40Right?
03:41Even Nabi today, why have FIIs left arbitrage between developing markets interest rate and US interest rates is only narrowing.
03:48So then there is a flight of capital which says why should I invest in India.
03:52Better is that I invest in developed economy where there is no gap.
03:57So interest rates is a very big determining factor.
04:01In India we are now in the reversal cycle of interest rates.
04:04Interest rates are growing.
04:05Interest rates going up is a good sign for foreign capital to come in.
04:10Because then only they will find India to be an attractive market.
04:14Emerging markets.
04:15I just want to highlight that the rest of the emerging markets such as China, Taiwan, Korea, such countries.
04:22The market depth is very different from India.
04:27In India there are such sectors such as consumer discretionary, IT, financials.
04:34These are much dominated.
04:36If you go outside India, manufacturing is much dominated.
04:41Industry is much dominated.
04:42Artificial intelligence contribution from Taiwan, South Korea is very high.
04:48Because there are such companies that have the supply chain backbone of artificial intelligence.
04:52So that is not the case in India.
04:55India's market is very different compared to emerging markets.
04:58In China, Taiwan, Korea there are many manufacturing capabilities in China.
05:02So in my opinion, you cannot be one or other.
05:06You have to be an ant.
05:07So in India, you will give diversification.
05:11The reason why we have launched the Emerging Markets x India Fund,
05:14It is to say that the sectors you don't get exposure in India,
05:19you can buy through this fund.
05:22Like AI or Semiconductors.
05:24So it has to be and it cannot be another.
05:27so that would be my conclusion that at least
05:30if you have avenues
05:32then 5% of your money
05:34can go outside India to emerging markets
05:36okay
05:38in the next 12 to 18 months
05:40around an year
05:41or for 1.5 years
05:43which themes are attractive
05:45where you have better
05:48where you are showing opportunity
05:49where you are showing opportunity
05:51here if we invest
05:53then maybe
05:54the dent in the portfolio
05:56will recover
05:58good question
06:00we always have to invest in those themes
06:03if you are going to thematic
06:04if you are not diversified
06:05and you are going to thematic
06:06we always have to invest in those themes
06:09which have not performed yet
06:11whose structural story is correct
06:14it is there
06:15but performance
06:16has not come from any reason
06:17like quality
06:18like health care
06:21of course has performed
06:22but there are several other
06:23like quality
06:24growth
06:24such segments
06:26large caps
06:27which have not given performance
06:28they are at very good valuation
06:30so this segment of the market
06:33has not shown much performance
06:35I think those are the themes
06:37that you should consider
06:38sectors like defensive
06:39and defense
06:39have gone through
06:41so you know
06:42but that segments
06:43like health care is an evergreen sector
06:45health care is the drawdown market
06:47it is less than the market
06:48because it is a defensive sector
06:50you will always invest in the healthcare
06:53you will always do
06:53other than that
06:55I think quality is a very good theme
06:57which has not been played for many years
06:59but if you choose a fund
07:01which is structurally strong
07:03I think quality is a theme
07:05that you can focus on
07:06along with healthcare
07:07consumer discretionary
07:08is again one theme
07:09where we are very active
07:11because we have seen a lot of earnings growth
07:14in the sector
07:14it is shown in the sector
07:15it is shown in that theme
07:16Okay
07:17Retail investors
07:19what are the biggest risk
07:20what are you seeing
07:21in this time
07:22and the opportunity
07:23is also shown in the market
07:24for retail investors
07:26see
07:27retail investors
07:29market correction
07:30is a very good opportunity
07:31because
07:33I think
07:33what happens
07:34that
07:34the trend
07:36that
07:37the trend
07:38is low
07:38if you will see
07:40this behavioural trend
07:41this is more hnis
07:42compared to
07:43retail investors
07:44retail investors
07:46are very very strong
07:47and resilient
07:47because
07:48they are investing
07:49not just
07:50sometimes chasing performance
07:52but they are also investing
07:53keeping long term
07:54view in mind
07:54I think
07:55retail investors
07:56in this sector
07:58first of all
07:59if you have not invested in the beginning
08:01then
08:01you should start with
08:02a diversified theme
08:03which you get a little exposure
08:05second is
08:06you should look at themes
08:07which have underperformed
08:08so far
08:08like quality
08:09I told you
08:10look at themes
08:10like healthcare
08:11those I think
08:12are sectors
08:13that you should look at
08:15third thing
08:16retail investors
08:17opportunity
08:18is to add more units
08:19like market correct
08:21your investment
08:22gives you more units
08:24so
08:24I think
08:25I think
08:25it's a very good time
08:25for retail investors
08:26to invest into that
08:27I think
08:28the behavioural mindset
08:30is that
08:31once you start investing
08:32only redeem
08:33when you need money
08:35if you don't need money
08:36then
08:37invest
08:38and let it grow
08:39so
08:40yes
08:40to answer your question
08:41retail investors
08:42have a great opportunity
08:43I think
08:44large cap
08:45sectors like healthcare
08:46sectors like quality
08:47they can invest
08:48into these sectors
08:50right now
08:50because
08:51market correction
08:51because the valuation
08:53is a little attractive
08:54if you want to invest in small
08:56and mid cap
08:56then
08:57very good idea
08:59but
08:59you choose a fund house
09:01which has experience
09:02and has bandwidth
09:04to be able to select small
09:06and mid caps
09:06and let them
09:07and also investment horizon
09:08should be long
09:09I think
09:11I think
09:12I think
09:15I think
09:16I think
09:16I think
09:16I think
09:17just for my knowledge
09:20now
09:21what expectations are
09:22going on
09:23in the next
09:252030
09:25because
09:26we are talking about
09:26long term
09:28so
09:28here
09:28in the next
09:32will show
09:33some change
09:34in the portfolio
09:35will show more
09:36diversified
09:37more
09:37global
09:38more
09:38passive
09:41alternative
09:42what
09:42will show
09:44portfolios
09:44because
09:45this change
09:46has given
09:46many investors
09:48shock
09:49a lesson
09:50with the
09:51absolutely
09:51and this lesson
09:52was very important
09:53because
09:54people have not seen
09:55in the start
09:56especially like
09:57we were saying
09:57after the market
09:59they have not seen
09:59this lesson
10:01was very important
10:03to answer
10:05your question
10:06how will their portfolio
10:08change
10:08how is it
10:10first
10:11I'll take up your point
10:12of alternative investments
10:13alternative investments
10:14entry barrier
10:15is very high
10:16in PMS
10:17and AIF
10:191 crore
10:19so
10:21this falls
10:21every retail investor
10:23is not affordable
10:24for every retail investor
10:25you have to
10:26move to a different
10:27income bracket
10:27to be eligible for that
10:29having said that
10:30if you look at H&I
10:31retail investors
10:32then
10:33alternatives used to be
10:345% of the portfolio
10:36now there are 30%
10:37literally
10:37alternatives
10:39in the client's portfolio
10:40because
10:40alternatives
10:41there is
10:43unlike mutual funds
10:44which is fixed
10:45alternatives
10:45it is not fixed
10:46so you can
10:47you can launch
10:48more products
10:49in an alternative space
10:50but because
10:51its entry barrier
10:52is high
10:52it doesn't happen
10:54for retail
10:54what I am seeing
10:57increasingly in trend
10:59retail investors
11:00I think
11:01their portfolio
11:02will shift
11:02towards
11:03slightly more
11:04conservative
11:05ideas
11:06especially
11:07during market volatility
11:08such as
11:09hybrid funds
11:10multi asset allocation
11:11funds
11:12which are less
11:12in market volatility
11:14and today
11:15we have launched a
11:16REIT and INVIT
11:17mutual fund
11:18in the dividend yield
11:19fund category
11:20we have seen
11:22retail participation
11:23is very high
11:23within one month
11:24the fund has already
11:25crossed 600 crores
11:26in terms of AUM
11:28its underlying
11:28REITs and INVITs
11:30asset class
11:31which is not
11:32volatile
11:33market
11:33drawdown
11:34is low
11:34beta
11:350.19
11:36but
11:3799%
11:38kind of
11:39return
11:39I will envision
11:42seeing the trend
11:44that is happening
11:45in the market
11:45their portfolio
11:47will switch
11:48towards hybrid funds
11:49towards
11:50multi asset allocation
11:51funds
11:51and towards
11:52safer asset classes
11:53like REITs
11:54and INVITs
