India is expensive; investors willing to pay premium, says Mark Matthews

Anuj: Your thoughts on what is happening with the risk trade right now. Do you get a sense that we are seeing some sign of risk off and we could see the first round of emerging market correction?

A: I do not get that sense but of course the market has been incredibly strong this year. I think the maximum drawdown in the market has been less than 3 percent. It is highly unusual and so you would have thought especially during the summer lull that it would be an opportune time for the market to correct but when I look at the Nasdaq in particular because that is what has led the US stocks higher this year, it just seems that any time these big stocks like Amazon or Facebook go down, immediately people come out and buy them. So as much as I would have like to see some kind of a drawdown or a correction because those are always healthy for building a base. It doesn't yet seem to be occurring.

Latha: India is also battling at all time highs. Earnings are not catching up valuations just yet; there are too many disruptive issues like goods and services tax (GST) for instance. Are you battling this valuation argument and therefore staying away from Indian stocks?

A: I think that India, having just talked about technology stocks in the US, has some similarities; very expensive but people are willing to pay premium, pay high price for India for technology stocks and if we are trying to buy things that are cheap and haven't gone up a lot, it might not be a successful strategy at this point in time because this is a year of growth and momentum.

For entire interview, watch accompanying video...