Asset Allocation Strategy & Its Relevance In Volatile Times

Mark Mobius, an investment guru and ex- executive chairman of Templeton Emerging Markets Group at Franklin Templeton Investments has expressed very positive views on the Indian market. He hailed the Indian reforms and growth and has proposed 20% allocation in India in his new venture.  His conclusions are based on the strong macro foundation laid down years ago which has yielded 7.5% GDP, maintained fiscal deficit under control, inflation around 4 to 6% and ensured a reasonable currency performance.

Experts believe India has good long term prospects but in the short term may see some volatility due to the upcoming elections, interest rate rise leading to increase in inflation.

Important sectors to concentrate
Traditional sectors like agriculture and software will continue to play a vital role. However, to become leaders it is essential to concentrate on the research and innovation in emerging technologies like AI.  With a large customer base wanting to go digital, there is good opportunity to lead the global digital revolution by tapping this sector.

Suggested sector for HNI investment
Consumer tech is an upcoming space where HNIs should bet on as there is software everywhere from cars to food delivery.

Suggested investment path for banks
Banks should look at sound business path and asset light model without involving too much capital. They should have a core investment portfolio for secured returns and satellite portfolio to invest in upcoming areas to boost their income.

PE’s view on India
PEs have done very well in both entry and exits. In 2017, they grew 60% year on year over 2016. PE’s in India have invested about $26 billion. In exits also they have had the best ever year with handsome returns of $16 billion as compared to $10 billion the previous year. They are set to attain highs in the coming years.

*Data as quoted by Niren Shah, MD, Norwest Venture Partners India in the video

Investment options for HNIs in India
As opposed to previous years, markets are seeing a lot of volatility due to liquidity tightening. Therefore, right asset allocation matching to the risk appetite is becoming important.

Key sectors to invest are
•    BFSI
•    Consumer tech
•    Consumer packaged foods
•    Structured products

Managing the family office transactions
With the next generation stepping into much family run organization, there is need for unbiased advices from private banking professionals to allocate their resources appropriately.

HNIs and Philanthropy
Banks have their own philanthropic goals like Standard Chartered Bank has “Seeing is Believing” which is to tackle avoidable blindness. The HNIs support the banks to fulfill these causes or goals.

Private Banking in 5 years time
Private banking can reap best returns if they continue to be an independent advisor, client centric and give genuine advices with the interest of clients in the forefront. They have a potential to not only make the rich Indians richer but also the many millionaire NRIs wanting to invest in India with varied investment opportunities.

For insights on asset allocation strategy and its relevance in the volatile times, A B Ravi had a detailed discussion with Leo Puri MD,UTI Asset Management Company, Niren Shah, MD, Norwest Venture Partners India and  Sandeep Das MD & Head Private Banking, Standard Chartered Bank

Catch the full episode: https://www.youtube.com/watch?v=kdaT6MJi3eQ