S Naren of ICICI Prudential Mutual Fund suggests SIP in these undervalued themes1 min read . Updated: 22 Sep 2020, 01:16 PM IST
- 'There are areas where the markets are massively undervalued'
- 'I believe this is the right time to start SIP in themes like special-situation, banking, infrastructure, value-oriented'
Covid 19 became the major reason for the stock markets worldwide to be highly volatile this year. Be it the announcement of lockdown or now for the recent few weeks, any news about vaccine, crazily impacts the sentiments of direct stock pickers. But top fund managers in the Indian mutual fund industry see a lot of opportunities in this clumsy stock markets. S Naren, chief investment officer, ICICI Prudential Mutual Fund believes this is the time to look at the most undervalued themes and sectors to start investing systematically through SIPs for a long term.
"Markets are not cheap as they were six months back. But clearly, there are areas where the markets are massively undervalued. I believe this is the right time to start SIP in these undervalued themes like special-situation, banking, infrastructure, value-oriented," says S Naren.
"Focused strategy following value-oriented approach can also be looked at," Naren adds.
Banking stocks have come down massively in the last three weeks. These stocks are down by up to 15% since the beginning of this month. State Bank of India is down by 15%, ICICI Bank is down by 11%, Axis Bank, by over 14%, IndusInd Bank has fallen by 11%. These stocks have been a major drag on the performance of the bankex index.
S Naren is also confident of dividend-yield theme. He says, "there are a numerous stocks where dividend yield is higher than bank deposit interest rates. This gives me a lot of confidence in the theme like dividend yield. There are numerous cheap stocks at this market level."
Naren believes, 20 years in small and midcap appears to be a great investment
The fund house has recently launched a new fund offer of ESG Fund. Naren says, "ESG theme is an excellent and interesting long term opportunity at this point in time.
Gold acts as an insurance for your investment portfolio
Naren also advised some position in Gold. He says that the presence of yellow metal in a portfolio currently is more from an insurance perspective rather than investment at this point in time. "This asset class is likely to deliver returns in case the global central banks make a miscalculation in handling economic policy."