Equity as asset class yet to grow in EMs: Barclays

Satya Bhansal, Chief Executive, Barclays Wealth India said that the asset mix of the client portfolio largely depends on his ability to carry the risk. He said that the asset mix remains largely intact because the company believes that the growth for equity as an asset class in emerging market like India, is yet to happen.

Excerpts from CNBC-TV18's exclusive interview with Satya Bhansal:

Q: Starting of, currently with all the global headwinds, high interest rates scenario, inflation, crude oil prices being a concern. What is the best asset mix you would recommend for investors to safeguard their portfolio?

A: For the asset mix, we have to look at the overall client profile, not only in terms of his ability to carry the risk but also his composure of carrying the risk. So it remains largely intact because we still believe that the growth for equity as an asset class in emerging market like India, is yet to happen. Typically we work out a strategic part and a tactical part of the asset. The tactical part is unsure. When the markets are little choppy or when the markets are in a bullish mode, you start looking at your tactical asset allocation a little more proactively but more often than not your strategic asset allocation remains largely intact.

Q: What would be the assets in the strategic basket and what would be the tactical basket assets?

A: I think a thumb rule is very difficult. But generally people talk about around 70% strategic and 30% tactical. But we have seen clients depending on their own investment behaviour and the ability to engage in the market. They try to move their tactical asset allocation anywhere from 10% to 40%.

Q: What have been the asset classes that you have favoured over the past one-year. Have you favoured commodities, is there a way in which Indian investors can play the commodity card?

A: Yes, there are ways and there are limited product ranges available currently on the onshore market but there are certain ways of creating a pay-off on certain commodities in India onshore as well. We are also looking at possibilities, where by using the permitted offshore limit the clients can take the exposure on certain specific asset classes and solutions, which they are not able to take onshore.