The CIO of 3P Investment Managers is overweight on banks and moderately underweight on IT companies. Here's the market maven's sectoral outlook and portfolio strategy for long-term market-beating returns
(L to R) Prashant Jain, CIO and fund manager, 3P Investment Managers and Ashwani Kumar, portfolio strategist and co-fund manager, 3P Investment Managers.
Image: Neha Mithbawkar for Forbes India
In the last of a three-part interview series, Prashant Jain, CIO and fund manager, 3P Investment Managers, is joined by his co-fund manager Ashwani Kumar, to discuss their portfolio strategy and decode how the fund outperformed markets since its inception last year.
Jain and Kumar, who have navigated volatile market cycles over 33 years, are overweight on banks even as most lenders continue to report deposit and margin challenges. In fact, as of June 28, the fund’s total exposure to five bank stocks comprises the highest allocation, of 31.4 percent, in the portfolio.
“Many heavyweights have underperformed for a fairly long period and valuations have become quite reasonable,” Jain reasons. “This is one of the few spaces where there is some upside and it is also a very large part of the benchmark index.”
The fund managers are also very bullish on the consumer discretionary sector, which accounts for 12.1 percent of the portfolio. “The income pyramid in India used to be triangle but now it is diamond-shaped,” Jain explains. “Spaces like airlines and food delivery are low penetrated categories and we expect them to exhibit good growth.”
3P Investment Managers is moderately underweight on the IT sector and sees margin headwinds in the offing. “It was only during the Covid-19 pandemic that IT companies grew at a fast rate, but that big surge is now over. There is also some risk of a slowdown in Europe,” Kumar points out. “These are high quality businesses, but the valuations are a bit expensive and growth visibility is low,” Jain adds.