It would be prudent to deploy the funds through systematic investment plans (SIPs), he told the channel as there are factors such as risks over monsoon distribution and political uncertainty playing on the market too.
Even as the market comes to terms with the 10 percent cut it has had from its all-time highs, it raises queries on whether it is time to increase lump sum investments.
But Nilesh Shah of Kotak Mahindra AMC recommends otherwise. “This is not the right time for lump sum investments for those who are neutral or overweight on equities. Even for those who are underweight, I would recommend systematic transfer plans,” Shah, MD, Kotak Mahindra AMC told CNBC-TV18 in an interview. He advocated this strategy as the market is likely to be volatile going ahead.
Elaborating on the market’s scenario, he further stated that the downside is likely to be protected based on earnings and economic recovery. The upside could be capped due to political uncertainty, he said.
Additionally, he said there were fears over an upswing in oil prices along with escalating trade war tensions.
So, in this choppy market, it would be prudent to deploy the funds through systematic investment plans (SIPs), he told the channel as there are factors such as risks over monsoon distribution and political uncertainty playing on the market too.
Shah also recommends choosing largecaps over mid and smallcaps. “Clearly, mid and smallcaps are above ten year historical book value, while largecaps are at 5 percent premium to ten-year historical value,” he added.
Explaining the shift to organised space, he cited the example of Titan, which is a beneficiary of this kind of shift. “This is a big wave coming and these companies could grow at high speed ahead,” he added.In FMCG space, he expects the valuations to sustain due to growth prospects as well as market opportunity. Meanwhile, he also would like to see PSU banks’ demand for government borrowing programme.