Your debt allocation is significantly high at 39 per cent. What is the rationale behind this?
The equity component of the fund will move in a band of 55-65 per cent and our current weight of 65 per cent in equities reflects our bullish view.
In fact, when the equity component starts going above 65 per cent through appreciation, we book profits to bring it in line with the mandate of the scheme.
Your exposure to metals is considerably high at 15 per cent plus. What is your outlook for the sector?
We have been reasonably bullish on the sector for some time now. Not only has there been a secular recovery in commodity prices, but Indian corporates have shown significant cost advantage which makes them globally strong players.
With stronger than anticipated global economic recovery, and underinvestment in commodities over the past few years, we believe that the sector will outperform the market for some more time.
There seems to be no allocation to mid- or small-cap stocks in the fund. Why?
Mid-cap and small-cap exposure is limited as per the mandate of our scheme.
What is your outlook for equity and debt markets?
We remain bullish on the equity markets. We believe that India is among the best positioned in the region for the future.
We can expect increased allocation to Indian equities globally. Given the low household savings in equities, we can only expect this component to increase in India in the future.
