Tata AIA Life Insurance, which has assets of Rs 1,33,602 crore assets as of 31 August, offers protection, wealth, savings, child, health and retirement solutions. Harshad Patil, chief investment officer, shares with Nesil Staney his views on equity strategies and key sectors driving India’s growth. Excerpts:
What is your directional call on the markets at this level? Is the volatility to continue?
While the Indian equity markets have seen strong domestic flows persist, going forward, we could continue to see bouts of intermittent volatility on account of heightened geopolitical tensions as well as the broader markets trading at valuations above their long-term averages even as the large cap benchmark indices are near long term averages. We opine that a long-term investor with a 3–5-year view would do well to increase their allocation to equities if there is a sharp correction provided the asset allocation is broadly in line with their risk appetite.
What changes can we expect as the nation moves towards 2047 Viksit Bharat goals?
India’s Viksit Bharat 2047 vision targets inclusive growth, sustainability, and global leadership. It aims GDP to reach $30–40 trillion; with services contributing well over 50% of GVA. The vision aims at achieving net zero emission by 2070 with significant investments in manufacturing, infrastructure, logistics, health and education. We believe that this vision would bring broad-based transformation across multiple sectors like manufacturing, technology, green energy, healthcare, education, empowering youth, women and MSME and would result in significant wealth creation opportunities for a long-term investor apart from contributing to the cause of nation building.
What are your top picks among large, small and midcap stocks?
As a fund house, we believe in bottom-up stock picking based on rigorous fundamental research. Our team focusses on identifying high quality businesses which are delivering consistent earnings growth for long term value creation for our policy holders. Once identified, we tend to hold many of these companies over long periods across business cycles to unleash the power of compounding, leading to many of our identified stocks turning into multi-baggers. In addition, the Tata AIA Life Sector Leaders Index Fund offers a systematic way for investors to gain exposure to the strongest businesses across diverse sectors, complementing our fund managers’ bottom-up approach.
Which sectors are currently in a transitional phase that can be capitalised from an investment perspective?
The Indian equity market presents significant wealth creation opportunities, as the economy is expected to grow multi-fold over next few decades. This will provide opportunities to companies to grow their businesses, multiply their earnings and provide sustained returns to investors. India’s economic growth is fueled by several themes such as growing consumption, rising disposable income, move towards organized players, global shift in supply chains, increased impetus on manufacturing through supportive government policies etc. This will benefit companies which have established themselves as leaders in their respective businesses, hence providing investment opportunities across sectors. As already discussed, the Tata AIA Life Sector Leaders Index Fund employs a systematic approach to select stocks based on its rank as per market capitalization in each of the respective sectors out of the universe of top 500 stocks. The fund invests in diverse sectors, offering a broad, sector-diversified portfolio that minimizes concentration risk while capturing opportunities across the market spectrum.