Summary
Vetri Subramaniam, CIO provides his insight into the current economic scenario and investment outlook. Amit Premchandani, fund manager, UTI value fund, presents the fund’s investment strategy, and the sectoral movements over the last six months driven by the strategy and the valuations.
Highlights
- Indian Economy
- Higher profits of last few years are not being channelled into investments unlike 2004-08 period,
- Over last few years FDI has remained stable and remittances have increased. But net FDI is dropping due to large disinvestments.
- FPIs holdings in Gsecs increased from 11 B USD in Sep 23 to 22 B USD by June 24
- Rupee largely stable against other currencies dropping against USD
- Economic indicators favourable with CAD/inflation in control and real GDP gr @7% FY 25
- Budget expected to continue fiscal consolidation. RBI dividend is a bonus.
- Valuations
- Nifty 50 is expensive, mid and smallcaps far more expensive
- Yield differential of 2.2% favours 10 Year Gsec over Nifty50
- Investment Outlook
- Staggered approach to equity investment, prefer BAF, MAF and Equity savings for lump sum
- Positive on banking and financial services and pharma and Sip in UTI innovation fund
- UTI Value fund
- Value Focus: UTI Value Fund’s approach to intrinsic value helps identify undervalued stocks, enhancing long-term returns while managing risk
- Sector exposure is modified based on valuation metrics to optimize returns.
- The fund has consistently outperformed market indices, albeit with higher volatility.
Balancing Value and Growth: The fund’s strategy of blending value and growth elements is essential for achieving sustainable returns in a fluctuating market.
