investment strategy: Not bullish on equities; go with a 50:50 allowance: Siddharth Vora

“We are selectively bullish on autos. We may see some sort of consolidation within the auto pack, but the visibility of growth among the major sectors – IT, Pharmaceuticals, FMCG or Automotive – is pretty much leading the pack. in terms of growth visibility.If the view is longer, I would still prefer to entrust automotive accessories to OEMs. Siddharth VoraFund Manager and Head of Investment Strategy – PMS, Prabhudas Lilladher.

What was your portfolio strategy? How do you manage this volatile market, how do you manage money market signals?
We have an equity strategy and an asset allocation strategy. Overall the asset allocation view is that we are not bullish on equities as an asset class while we are bullish on India and the economy and how the recovery actually takes place.

But in terms of the variables we track to go bullish on equities as an asset class, we find that whether it’s global macros, monetary, overall valuation comfort, or technical risk reward, the situation is not very bright for equities. We are following a 50-50 approach in terms of exposure to equities and other equities and in terms of our equity driven strategy the big sector calls in terms of being overweight and underweight in certain sectors this phase is behind we.



It’s time to focus on stock picking because all the major themes where growth was very visible in the short term, seem to have been assessed to perfection and it’s a matter of identifying certain niches whether in pumps, hotels, capital goods or defence. . These are areas where growth visibility is very high, but now it’s a matter of identifying the business you really want to own in these spaces. It was of course volatile, but our asset allocation strategy was able to manage this volatility smoothly.

50% silver is what you’re sitting on. Since the June low, isn’t that risking a lot of underperformance?
This is the case when we take cyclical calls in terms of asset allocation where we only invest in index funds and ETFs in different asset classes. We can’t play all the tactical moves but we were at 36% equity. We increase this to 48% at around 15,700 levels. So yes, we have increased our equity exposures but we are still not able to go beyond 50% at these levels.

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The strategy depends a lot on how the model interprets, how the variables move and how we are actually guided by the quantitative model to do the asset allocation and we usually don’t take any active calls as such.

Despite the race, does the car space warrant a new look and are there more advantages over current levels?
Within the broader automotive pack, in the PMS that we manage, we have been bullish on Motherson Wiring for some time, almost since its split and we continue to maintain and grow our allocations in the wiring harness sector given his tremendous resilience. if EV on not EV. That, coupled with Motherson’s strong market share with superior free cash flow, ROE makes us believe it’s a story to park in the automotive space.

We are selectively bullish on autos. We can see some sort of consolidation within the automotive pack, but the growth visibility among the major sectors – IT, Pharmaceuticals, FMCG or Automotive – is pretty much leading the pack in terms of growth visibility. Of course, the debate around valuations will start to creep in when it comes to taking a fresh look at automotive, but if the view is longer, I would prefer automotive accessories to OEMs.

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