“We are going out and telling our investors that next three to six months give you an opportunity. For India, specifically, large caps become attractive, and in due course, after seeing mid and small caps correct another 15-20%, they come in the buy zone,” said the New York based fund manager.
While the Indian market has corrected by around 10-11% from its all-time highs, he noted that it has seen a sharper decline of another 5-7% in dollar terms due to the rupee depreciation. “So the markets, for the strong structural story there is, in dollar terms, is effectively 17-18% cheaper.”
Also Read: Why a weaker rupee is not necessarily a bad thing
Also, while the market remains spooked by the uncertainty surrounding the new US administration’s policies, he noted that “The spike in bond yields is good because somewhere this provides the guardrails for the new administration not to do anything radical and to be fiscally prudent.”
Also Read: DBS Bank expects rupee to trade in the 85.5-86.5 range against the dollar in coming weeks
Over the last few months, Chadha has shifted its portfolio towards IT, pharma, and healthcare sectors as domestic cyclical stocks turned expensive. Factors such as RBI tightening and a slowdown in post-election project activity further reinforced their decision to rebalance the portfolio.
Also Read: US bond yields may hit 5%, says Geoffrey Dennis
He prefers to add consumption, domestic cyclicals, and quality small and mid-caps on further dips.
For more details, watch the accompanying video
First Published: Jan 13, 2025 12:28 PM IST
