If the market were to correct another 5-6 percent, there would be compelling opportunities, said Taher Badshah CIO-Equities, Invesco Mutual Fund.
Celebrating the Mutual Fund day seventh of every month, CNBC-TV18 spoke to Taher Badshah CIO-Equities, Invesco Mutual Fund to gauge the market sentiment and mood in the mutual fund industry, especially after Sebi’s market capitalization definition and was the industry facing any redemption pressure.
He said neither the industry nor their firm was facing any redemption pressures. In fact if the market were to correct another 5-6 percent, there would be compelling opportunities, he added.
Moreover, earnings have been better, time correction in few stocks, absolute correction in many stocks has led to PE multiples on aggregate portfolios coming to reasonable levels and in turn giving them flexibility to push a bit more to investors that they could not do six months prior.
He said it was hard to say if Sebi’s market cap definition would lead to any more volatility. In fact they would have to increase midcap exposure in some of the funds to meet Sebi norms.
When asked why large stocks like HDFC twins, Maruti, RIL were seeing delivery selling and slowdown in DII investments, Badshah says there has been a moderation in domestic fund flows from January to February and it is hard to say if this suggests any kind of trend but it has happened in a month where there have been a confluence of negative factors like LTCG, news on banking sector and some global news which has brought about nervous sentiment.
On the other hand, market valuation was looking expensive and it was just going one-way up. Therefore, some correction was called for -- readjustment of multiples, readjustment of risks is currently underway, he said. Some of this is impacting even the largecap space, especially in stocks that have given decent returns in the past, he added.
“Market is playing on anticipated line,” said Badshah.
Talking about Invesco Growth Fund, where they have around 29 percent exposure to banking and financial and around 6-7 percent to IT
He said although they have an exposure to ICICI Bank but a large part of their allocation is also into non-corporate banks, which has worked well for them. The returns generated from these exposures for the last 1-3 years basis have been consistent, he said.
With regards to IT also their exposure into specific stocks have given good returns and has worked well as a strategy because as a growth fund they need to have minimum representation to most of the important sectors, said Badshah.
