Global supply shocks are the primary driver of higherglobal inflation – but rise of global yields is more structural in nature onaccount of rising deficits in the Western world coupled with massive capexspending by AI hyperscalers.
Look for a delta in supply situation throughde-escalation, rather than hoping for resolution of conflicts – which may nothappen any time soon. Markets will bounce back on de-escalation and reductionin supply shocks.
Srivatsa manages the UTI Large & Midcap Fund and UTIAggressive Hybrid Fund in his long standing value style. He is very valuationfocused and places greater importance on earnings growth over narratives.
He has maintained his large cap bias (relative to peerswho have ventured more into mid and small caps) as he finds better value there.While this has not helped performance over the last 6 months, it has deliveredconsistent results over the long term and he remains confident aboutmaintaining this into the future as well.
His value style has seen him investing in IT servicescompanies when many managers are preferring to remain on the sidelines. Highdividend and cash flow yield coupled with overstated (in his view) fears aboutbusiness prospects in an AI driven world have been the key drivers for hispositive call.
He is positive on commodities – metals in particular asthe global energy transition theme and power infrastructure build out isdriving huge demand for steel, copper and aluminum.
He is also bullish on energy security as a theme – with afocus on the oil and gas ecosystem.
He believes banks are in a sweet spot with growthtailwinds, potential NIM expansion from a rate hike cycle and reasonablevaluations.