Woods: What sectors are you bullish on? What are you staying clear of?
Shah: We are bullish on banking, capital goods, automobiles, pharmaceutical and logistics sectors. We are wary of commodities, real estate and FMCG sectors.
KEA: How different is your portfolio now than what it was when markets were at 8,000?
Shah: When markets were at 8000, we were overweight on consumer, pharmaceuticals, utilities, Nifty and cash in our portfolio. Now it is more cyclically oriented with we being overweight on capital goods, automobiles and having reasonable weight in banking.
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Bonu: The fund seems to invest a lot in industrial materials and financial services. What makes them attractive?
Shah: We are positive on these and even the market benchmark is invested in these.
Rapid recovery in our economy since 2008 has led to exhaustion of excess capacity. So, demand for capital goods will go up to expand capacity.
KEA: Is intense competition in the telecom sector eating into revenues?
Shah: We feel the telecom sector may take a few months to bottom out.
Woods: What is a healthy mix of investments for a 30-year-old salaried person?
Shah: Generally, younger people can take higher equity risk due to high remainder lifespan. Mutual funds could be a way to get that exposure. Of course, the ability of individuals to tolerate ups and downs will determine their exposure levels.
Woods: You earlier said commodities were a problem sector. So should I stay away?
Shah: We do have exposure to commodity stocks. However, they seem to be discounting high growth in the world economy and, hence, they can fall if growth disappoints.
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