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Anirudh Garg, partner and fund manager at Invasset PMS, believes that the market is not done with new highs and analysis of current trends and dynamics points to a 10% rise. Says.
Garg, who has 15 years of market experience and uses AI algorithm models, is betting big on the tourism sector and considers it an essential part of his portfolio. Garg, who trained and qualified as a chartered accountant, said improved infrastructure, evolving consumer behavior and a recovery in the airline industry are driving major changes in the country’s tourism sector.
In an interview with money controlHe said the 2024 budget should increase capital spending by at least 20% and remain conservative on deficit reduction. This will ensure a balanced approach to fiscal management while stimulating economic growth, he said.Edited excerpt
Do you think tech stocks are pricing in all the positive expectations after December quarter results?
Invasset currently maintains a cautious stance on technology, FMCG, pharmaceuticals and white goods, given the ongoing ‘old economy run’. Although Invasset recognizes that these sectors have already experienced significant market activity and price corrections reflecting negative news, we do not view these sectors as attractive investments.
Despite the potential for global growth as U.S. inflation stabilizes, Invasset doesn’t see technology stocks as cheap or growth-friendly enough to warrant a place in a portfolio. Instead, the company prioritizes interest rate-sensitive sectors and capital investment beneficiaries, aligning with market trends and presenting what it believes are excellent opportunities for growth and value.
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Do we expect a 1,000-1,500 point correction after the budget is passed?
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Our strategy involves making strategic and prudent investment decisions, always vigilantly considering where and how much to invest. To avoid short-term market timing, market fluctuations, such as a potential 1,000-1,500 point post-budget correction, are not anticipated. Instead, we use a multi-factor algorithmic model to classify market phases. Based on our analysis of current market dynamics and trends, we believe the market could rise 10% as opposed to a correction.
In particular, what do you expect from the provisional budget bill on February 1st ahead of the general election?
We believe that budgets should focus on capital expenditures. Investing in a capital project can be likened to purchasing a store for future income generation, rather than spending on immediate, temporary needs.
We advocate increasing capital spending by at least 20%, but not by more than 25 basis points, in conjunction with a conservative approach to deficit reduction. This will ensure a balanced approach to fiscal management while stimulating economic growth.
Furthermore, we expect the sectors that led last year to continue to perform well, particularly those related to capital expenditures.
Also read: Martin Soler expects PM Modi to be re-elected, says it will be good for India and the world
Does the government expect to increase the offering for sale (OFS) issuance in the next financial year FY25?
In FY24, the government’s cautious approach to disinvestment led to a modest Rs 8,000-crore raise, which rose to around Rs 11,000-crore with the addition of Hindustan Aeronautics’ OFS . This figure fell short of the ambitious target of Rs 51,000 crore. The focus primarily on public sector initiatives (PSUs) suggests an emphasis on achieving goals that have not been achieved so far.
We expect that the government’s disinvestment efforts in FY25 could reach between Rs 30,000 billion and Rs 50,000 billion. This forecast is based on the government’s continued focus on PSUs.
Also read: Swiggy’s Sriharsha Majety says IPO preparations are underway
Do you think the domestic tourism space should be part of the portfolio?
Invasset has identified the domestic travel and tourism sector as a highly promising investment avenue. Strengthening infrastructure through government initiatives and private investment, especially in popular destinations like Goa, signals significant change. Post-COVID-19, the hotel accommodation sector has seen significant growth, supported by sustained domestic tourism, increased preference for leisure travel, rising income levels and demand for premium products.
The aviation sector has overcome past challenges and is showing positive indicators such as reduced competition, lower fuel costs, increased demand for air cargo, and aircraft occupancy of over 90 percent. Tour and travel companies are also benefiting from sectoral growth.
With improved infrastructure, evolving consumer behavior and a recovery in the airline industry, Invasset is bullish on the domestic tourism sector and sees it as an attractive opportunity to incorporate into its portfolio.
Do you expect inflation to worsen due to the Red Sea disruption? Will the Fed’s interest rate cuts be delayed further?
Tensions in the Red Sea are of undeniable importance, affecting key global trade routes. When it comes to the Fed’s interest rate decisions, it is important to be aware of the Fed’s broader economic policy context, and second-guessing may be unwise. Despite disagreements, the market maxim of not fighting the Fed is widespread.
Considering inflation a challenge of the past, the current outlook is bullish, especially for rate-sensitive sectors such as real estate and metals. Invasset believes these sectors are well-positioned to grow in the current economic environment, regardless of near-term geopolitical tensions or Fed interest rate adjustments.
Your fund, Growth Pro Max Fund, has returned 97% over the past year. What is the strategy behind the fund?
Invaset’s Growth Pro Max Fund has returned an impressive 97% over the past year (2023), highlighting the importance of not considering past returns as an indication of future performance . The fund’s success is due to ‘Invasset AAID’, a sophisticated code distilled from 30 years of experience that ensures unbiased investment decisions across sectors, stocks, market capitalizations and investment styles.
Our investment philosophy is based on four pillars. Value investing involves buying stocks below their intrinsic value and avoiding potential value traps in bull markets. Growth Investing uses a “relative change compensation metric” of the top 100 companies to identify emerging market leaders in bull markets. In overvalued markets, there is a shift to high-quality investing that focuses on companies with strong fundamentals, similar to Warren Buffett’s strategy.
The investment cycle is 3-4 years, aligned with a long-term perspective to avoid excessive volatility and provide stability to investors. Investors are encouraged to consult a financial planner before making decisions, highlighting the Fund’s commitment to transparency, long-term returns, and a unique investment approach based on experience and advanced algorithms.
What is your favorite sector for the fund’s performance and why?
Invasett analyzes global events affecting growth and inflation, recognizing the current stage of the ‘old economy run’ where interest rate-sensitive sectors and capital expenditure (capex) beneficiaries are affected are doing. In contrast to global challenges, India’s conducive environment for capex-led growth stands out, as evidenced by the introduction of GST, increased collections and the government’s high allocation for capex. is. Sectors such as defence, railways, infrastructure, power and PSU banks were the focus of investment.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not the views of the website or its management. Moneycontrol.com advises users to check with certified professionals before making any investment decisions.
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