The fund maintains strict discipline regarding weightage for individual stocks (not more than 5 per cent of the corpus) and industries (15 per cent of the corpus). This keeps our fund's portfolio diversified.
We expect strong GDP growth in 12-24 months. We would be overweight on industries with strong domestic demand.
We would also be positive on companies which operate in industries where the country's competitive advantage has been demonstrated to enable these firms to participate in the international markets. We expect interest rates to remain modest, and boost investment and spending on infrastructure.
The metal sector has the largest weightage in your portfolio. What is your outlook for the same?
India has a competitive advantage in aluminium and steel. With inflation beginning to creep globally and the dollar weakening, commodity prices should sustain their price levels over the medium term.
You have trimmed exposure to banking and FMCG. What is your view on these sectors going forward?
These sectors should benefit from the strong domestic economic growth. However, in banking issuance of fresh paper could limit returns, while in FMCG price competition could sustain longer than anticipated.
What is your market outlook for the year 2005?
Domestic economy is likely to generate strong growth over the next two-three years and the markets should reflect this.
This is perhaps the first time that our stock markets have followed fundamentals. This uptrend reflects a shift for the economy and households (who have been biased in favour of fixed income).
