The PGIM India Midcap Fund which Vivek manages has come back into top quartile on a 1 yr basis on the back of quality factor – PGIM’s style – beginning to finally reassert its outperformance over value. Focus on high quality high growth stocks has always been a rewarding experience, and Vivek says this will continue to drive long term outperformance.
Impact of trade uncertainties and geo-politics on markets is looking like a Bollywood movie with lots of turns and twists in the plot. That said, India is a more domestic focused economy and Government’s efforts to boost consumption will have an impact in the coming quarters, which will help the market navigate external trade issues.
The flood of IPOs hitting the market is a mixed bag –some are excellent businesses which are now getting listed while many are questionable business models where promoters are getting exits at the hands of retail investors. There is froth in the primary market – time to be very selective.
Consumer discretionary continues to be a favourite for Vivek, who is not very worried about the recent run up in prices as their long growth runways leave sufficient scope for wealth creation even from current levels.
Despite the consumption boost from policy measures, he continues to be cautious and very selective in the FMCG space which is seeing sizeable distribution disruption which is making several brands vulnerable.
Vivek is not swayed by the value argument in IT services companies – valuations take a backseat when the playbook is getting upended through multiple disruptions. Companies that adapt to new realities will do well, many may be adapting too slowly for his comfort.
Beyond discretionary consumption, Vivek likes healthcare, communications, cement, specialty chemicals and financials.