The decisive victory of the UPA has forced a lot of portfolio managers to change tack as far as advising investors goes. They are now suggesting to investors that they move as much as 30-50 % of their portfolio from large-cap to mid-cap stocks. For investors who had as much as 20-40 % cash levels in their portfolio are being asked to invest this money in equities.
Global uncertainty coupled with slowdown in GDP growth and corporate earnings forced investment advisors to ask their clients to go slow on equities.
Not many were convinced with the recent run up in equities and there was still a lot of cash waiting to be invested. Now most of this cash is expected to find its way into the markets and most people feel that the cash may reach the market through mid-cap stocks.
Antique Broking, for instance, believes that clients should remain fully invested and have a zero cash balance. “We are overweight on industrials and banking and underweight on defensives such as consumer staples and pharmaceuticals,” said Krish Shanbaug, Head of Research, Antique Broking. He added that they have added risk to the portfolio by including non-index stocks such as Asian Paints, Ashok Leyland, Jindal Steel & Power, LIC Housing Finance, IBN18, and Sun TV.
“With political risk having reduced, there is a case for a rerating of India,” said Yogesh Kalwani, Head, Investment Advisory , BNP Paribas Wealth Management. BNP Paribas has recommended its investors to hold 30% in mid-cap stocks. “Cash which stood at 15-20 % in our portfolio before the election results will be deployed over a period of time when suitable investment opportunities arise,” he added.
According to Vaibhav Sanghavi, Director (Funds Management), Ambit Capital, there is optimism about the path the government will follow in managing the economy. “We have entered a five year bull run,” he said. Cash with us which stood at 20-30 % levels is being deployed into mid-cap stocks. With frontline stocks looking expensive, Mr Sanghavi has midcap stocks to his portfolio while being bullish on the power and infrastructure sectors. Anand Rathi Wealth Managers, meanwhile, had no cash in its portfolio and was invested in large-cap stocks.
“We recommend a 30% investment in mid-caps given the valuation gap between large-cap and mid-cap stocks,” said Alok Ranjan, Portfolio Manager, Way2Wealth which had 5% of its portflio in cash after having invested in large cap stocks. Today, that has changed with a 40% allocation in mid-cap stocks.
There are those who think this rally has been too fast for comfort. Sharekhan Portfolio Manager, Suhas Samant, for instance , has increased his exposure to mid-cap stocks and is now sitting on 20% cash. The balance is equally split between mid-cap and large-cap stocks.
Global uncertainty coupled with slowdown in GDP growth and corporate earnings forced investment advisors to ask their clients to go slow on equities.
Not many were convinced with the recent run up in equities and there was still a lot of cash waiting to be invested. Now most of this cash is expected to find its way into the markets and most people feel that the cash may reach the market through mid-cap stocks.
Antique Broking, for instance, believes that clients should remain fully invested and have a zero cash balance. “We are overweight on industrials and banking and underweight on defensives such as consumer staples and pharmaceuticals,” said Krish Shanbaug, Head of Research, Antique Broking. He added that they have added risk to the portfolio by including non-index stocks such as Asian Paints, Ashok Leyland, Jindal Steel & Power, LIC Housing Finance, IBN18, and Sun TV.
“With political risk having reduced, there is a case for a rerating of India,” said Yogesh Kalwani, Head, Investment Advisory , BNP Paribas Wealth Management. BNP Paribas has recommended its investors to hold 30% in mid-cap stocks. “Cash which stood at 15-20 % in our portfolio before the election results will be deployed over a period of time when suitable investment opportunities arise,” he added.
According to Vaibhav Sanghavi, Director (Funds Management), Ambit Capital, there is optimism about the path the government will follow in managing the economy. “We have entered a five year bull run,” he said. Cash with us which stood at 20-30 % levels is being deployed into mid-cap stocks. With frontline stocks looking expensive, Mr Sanghavi has midcap stocks to his portfolio while being bullish on the power and infrastructure sectors. Anand Rathi Wealth Managers, meanwhile, had no cash in its portfolio and was invested in large-cap stocks.
“We recommend a 30% investment in mid-caps given the valuation gap between large-cap and mid-cap stocks,” said Alok Ranjan, Portfolio Manager, Way2Wealth which had 5% of its portflio in cash after having invested in large cap stocks. Today, that has changed with a 40% allocation in mid-cap stocks.
There are those who think this rally has been too fast for comfort. Sharekhan Portfolio Manager, Suhas Samant, for instance , has increased his exposure to mid-cap stocks and is now sitting on 20% cash. The balance is equally split between mid-cap and large-cap stocks.
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