Neelesh Surana, Chief Investment Officer at Mirae Asset Mutual Fund and a star fund manager, is bullish on banking and insurance sectors
21-Jul-2022 •Chirag Madia
Mirae Asset Mutual Fund, one of the leading equity money managers, is positive on domestic markets despite the multiple headwinds like higher inflation, increase in oil prices and high interest rates.
In an interaction with Value Research, Neelesh Surana, Chief Investment Officer (CIO) at Mirae Asset Mutual Fund says that, on the bottom-up basis they see revival in multiple sectors which will lead to growth in gross domestic product (GDP) and corporate earnings.
"Investors can expect the returns of 13-15 per cent in the next three-five-year period, which is good given the current environment. I would suggest investors to continue to invest in equities despite the volatility," said Surana.
The fund house which manages assets worth Rs 1 lakh crore is bullish on sectors such as banking, insurance, consumer discretionary and pharma. Mirae's funds are currently negative on companies having low returns of investments (ROIs) like construction companies.
"If we look at the banking sector there is consolidation among the larger players. The balance sheet is now extremely clean and there is an uptick in credit growth. Even the valuations have turned attractive after sharp selling from foreign portfolio investors (FPIs)," said Surana.
FPIs have been on a selling spree in the domestic markets in the last few months on the expectations of a hike in interest rates by the Fed. In this year itself, FPIs have sold Indian stocks worth $30 billion.
Surana says that the 'froth' has been corrected and some might be winners in the next three to five years.
Over the past decade the fund house has managed to cement its position among the top performers in the equity fund category by generating positive returns across the market cycles.
Funds such as Mirae Asset Emerging Bluechip Fund, Mirae Asset Equity Savings Fund, Mirae Asset Focused Fund and Mirae Asset Tax Saver Fund are among the five-star rated equity funds by Value Research.
Surana, who is a star fund manager in the Indian asset management space, was speaking on the sidelines of the launch of Mirae Asset Balanced Advantage Fund.
Like all the asset allocation funds, this fund too will aim to capture the upside during a bull market and limit the downside during bear phases. The fund managers will follow an internal model based on adjusted PE (Price-to-earnings) and PBV (Price-to-book value) ratio in equities, and a buy and hold strategy in debt allocation.