The outbreak of COVID-19 across the globe came as a disruption that nobody was expecting, and the real change in front of investors is to pick stocks or sectors that are likely to weather the storm.
In ‘The Market Podcast’ with Moneycontrol, Saibal Ghosh, Chief Investment Officer, Aegon Life Insurance says that it makes sense to go top-down when picking sectors and ESG (environmental, social, and governance) rating can’t be overlooked.
“It is a difficult time for fund managers to make money. When it comes to top-down sectors, we are largely overweight in pharma even though we know that it is slightly expensive. And, they may become more expensive,” he said.
Ghosh further added that he is overweight on quality staples, overweight on insurance, and some of the quality consumer discretionary low ticket size companies is also something which is looking attractive and we are positive.
Another sector where Ghosh is positive is Telecom. “We believe that there is a structural growth story,” he said.
How to define Quality?
When it comes to quality, Ghosh says that he adopts a very simple approach. The first factor to be considered is – no compromise in the ESG rating. The other factor is the Return on Capital Employed or RoCE is far exceeded the average risk-free return for the last 5-7 years.
Apart from these parameters, we take a look at the distribution, brand as well as the franchise.
(Tune in to the podcast for more)
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