Dalal Street Voice: This fund manager has important message for investors planning to reshuffle portfolio in 2022

Yogesh Patil, Head - Equity, LIC Mutual Fund Asset Management Ltd advises existing investors to avoid making any change to their investment philosophy or style based on market flavour or market levels. 

Yogesh has over 18 years of rich experience, out of which 10 years in Fund management. 

Before joining LICMF, he worked as Sr. Fund Manager with Canara Robeco Mutual Fund. Edited Excerpts:

Q) A strong close for the year 2021 for equity markets – what are your expectations for the year 2022?

A) From a medium-to-longer-term perspective, we are positive on the Indian equity markets. India is one of the fastest-growing economies in the world with the highest proportion of millennials.

We believe that there are multiple drivers supporting growth like Consolidation, Digitalization, Reforms, Domestic Manufacturing, etc.

Q) What are your expectations from the finance minister on Budget 2021?

A) We seek more clarity on the Fiscal Deficit front and Government Capital expenditure.

Q) Some of the sectors that did well in 2021 were power and metals, which house some big PSU names as well. Do you think these sectors could continue to remain in focus in 2022 as well?

A) Yes, the fundamentals of these sectors will continue to remain volatile with volatility in commodity prices.

Q) How do you view new-age companies that hit D-Street in 2021. But when growth looks more lucrative than value – how do you take your pick? Being a value investor – what percentage should one keep in the portfolio?

A) These business needs to be evaluated on the basis of growth potential and size of opportunity because most of them prefer Opex Vs Capex.

The initial phase of their business plan might be to cater towards the new opportunity or new set of demand or solving consumer problems by using technology and most of the companies are in investment mode but may have high operating leverage.

So, portfolio allocation is largely dependent on the time horizon and risk appetite.

Q) More than Rs 1 lakh cr was raised from primary markets in 2021. What are your expectations from 2022 on the quantum of money and any big companies, which you are looking forward to?

A) The IPO boom is a reflection of buoyancy in the secondary market. IPOs of companies with a reasonably good management competence, track record, and growth potential are likely to continue to see a good response from investors.

Q) In terms of asset allocation – how do investors plan their investment journey in 2022?  

A) My advice to existing investors is do not change your investment philosophy or style based on market flavour or market levels.

Rather, time to focus on your asset allocations based on available options and investment goal because that makes big difference in overall portfolio returns.

Q) Equities delivered many multibaggers in 2021 – do you think 2022 will also be as thrilling for investors looking to double wealth outsmarting other traditional asset classes?  

A) Predicting the market is a futile exercise, but a stock-specific rally might continue in 2022 based on fundamentals and valuations.

Market peaks when the valuation reached to peak – historically, on a CAGR basis we have seen earnings on a growth trajectory – but it’s the valuation that moves high and low depending on various reasons including macro and micro.

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)