Marcellus Investment Managers is planning to launch a Global Alternative Investment Fund (AIF) in February to provide Indian investors an opportunity for portfolio diversification, led by their approach to tap into the potential of global equities, particularly in the US market.
“Putting all your eggs in one basket isn't sensible. Diversification is crucial, and data suggests it can reduce volatility and improve long-term returns,” said Pramod Gubbi, Founder of Marcellus while emphasising the significance of diversification.
In a similar context, Arindam Mandal, Global Equities Head at Marcellus, highlighted the appeal of the US market, citing its strong talent pool and robust economic growth. However, he cautioned against chasing big-name stocks, saying, “It's important to avoid chasing big-name stocks and instead focus on undervalued companies with strong fundamentals.”
The AIF addresses the limitations of the current investment landscape, such as the RBI's $7 billion limit on mutual fund investments in overseas equities, added Mandal.
“There is genuinely a need for all of us - provided those capital controls, allies, limits and all suit you - to be investing in global equities. Therefore, we've created a PMS in Gift City, and we'll be launching an AIF in Gift City in the next two months to run global portfolio and give access to Indians,” he said.
Marcellus remains optimistic about the long-term prospects of the Indian market, particularly in sectors like private sector banking, IT, and pharma. However, the firm warns about the overvaluation of certain sectors, such as capital goods, and advises investors to exercise caution.
“Every asset has its own cycles. Complementing this understanding, one should also invest in uncorrelated assets. This, when combined with systematic rebalancing, can actually improve long-term returns,” said Gubbi.
“From a valuation perspective, there are very few pockets of value. Private sector banks stand out in my view, from an absolute valuation perspective. Given that we're going through a learning slowdown, if you're willing to pay up, you might as well get some earnings visibility here. And that's where we're seeing some comfort in IT and pharma,” he added.
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