Kotak Mutual Fund is betting on these 5 sectors in 2019

Market movement in 2019 is likely to be largely dependent on the developing political scenario and global cues, Harsha Upadhyaya, Chief Investment Officer (Equities) at Kotak Mutual Fund, said.

While current valuations are not cheap, the fund house expects a further pick-up in earnings. “Corporate earnings, especially domestic-oriented companies, are showing an improving trend,” Upadhyaya said.

In terms of returns, the fund house expects moderate returns from equities, but expects the equity market to outperform other alternate asset classes.

Talking about midcaps and largecap valuations, Upadhyaya said midcap valuations are now approaching parity with largecap stocks.

The mid- and smallcap segment offers a better risk-reward ratio. Kotak Mutual Fund recommends investors to use near term volatility to build a long term portfolio.

The fund house is overweight on engineering, capital goods, cement, private banks and gas companies, while avoiding telecom and media and entertainment.

Kotak Mutual Fund is reducing exposure to consumption stocks as they are sceptical of continuing consumption growth at the same pace.

In the current calendar year, the Sensex and Nifty have risen over 4 percent till date.