 "Auto the best way to play urban growth: Manish Kumar")
This version corrects designation of Manish Kumar mentioned at the bottom to Executive Vice-President from the ED as mentioned in the earlier version
Insurance is long-term money, so how is your investment style different from institutional investors?
We always take a long-term fundamental call but balance it with market expectations and short-term price movement. Our objective is to deliver outperformance over the longer term and we need to do well in the short term to achieve that. We do that by occasionally realigning our portfolio - going underweight or overweight on a particular sector or stocks.
Which sectors are you overweight on?
Automobiles and private sector banking. We would have liked to have been overweight on the entire banking sector but are restricted by our sectoral cap. We are also marginally overweight on oil PSUs, cement and telecom. After the recent market correction, we are also constructive on domestic cyclicals such as capital goods, including construction & infrastructure and financial services, and are gradually raising our exposure in select stocks. These stocks have become more attractive on a relative basis in the past six months.
Which sectors are you negative or underweight on?
Consumer staples and consumer durables. We expect a revival in urban consumption but automobiles is the best way to play that recovery. We are also bearish on commodities, especially metals, chemicals and petrochemicals, given the slowing in China and fall in international commodity prices.
Mid-cap stocks have been leaders in the recent rally. Are they still attractive?
Mid-caps have run a bit now and as a basket, have outperformed large-caps by around 20 per cent in the past 12 months. It would be tough for them to outperform now and we would be very selective. Incrementally, our preference would be for large-caps over mid-caps. If we buy mid-caps, it would be on correction.
Manish Kumar, Executive Vice-President & CIO, ICICI Prudential Life Insurance
Insurance is long-term money, so how is your investment style different from institutional investors?
We always take a long-term fundamental call but balance it with market expectations and short-term price movement. Our objective is to deliver outperformance over the longer term and we need to do well in the short term to achieve that. We do that by occasionally realigning our portfolio - going underweight or overweight on a particular sector or stocks.
Which sectors are you overweight on?
Automobiles and private sector banking. We would have liked to have been overweight on the entire banking sector but are restricted by our sectoral cap. We are also marginally overweight on oil PSUs, cement and telecom. After the recent market correction, we are also constructive on domestic cyclicals such as capital goods, including construction & infrastructure and financial services, and are gradually raising our exposure in select stocks. These stocks have become more attractive on a relative basis in the past six months.
Which sectors are you negative or underweight on?
Consumer staples and consumer durables. We expect a revival in urban consumption but automobiles is the best way to play that recovery. We are also bearish on commodities, especially metals, chemicals and petrochemicals, given the slowing in China and fall in international commodity prices.
Mid-cap stocks have been leaders in the recent rally. Are they still attractive?
Mid-caps have run a bit now and as a basket, have outperformed large-caps by around 20 per cent in the past 12 months. It would be tough for them to outperform now and we would be very selective. Incrementally, our preference would be for large-caps over mid-caps. If we buy mid-caps, it would be on correction.
Manish Kumar, Executive Vice-President & CIO, ICICI Prudential Life Insurance