Global equity strategist Chris Wood has launched a dedicated long-only India portfolio of 16 stocks, including marquee scrips such as Reliance Industries Ltd, HDFC, SBI and others. Christopher Wood – Jefferies’ global head of equity strategy – is banking on India’s future demand potential and resilient domestic stock markets. The ace market strategist has been overweight on India in his Asia ex-Japan portfolio since the year began; he has maintained his position during the severe second wave of Covid-19.
In his weekly GREED & fear newsletter, Chris Wood highlighted that India has always had a significant representation in his long-only Asia ex-Japan portfolio. This portfolio was launched nearly 19 years ago, but for some reason, a dedicated portfolio for India was not created. “This will now change primarily because GREED & fear would like to add more Indian stocks which is not possible in the regional long-only portfolio since the idea is that these long-only portfolios, none of which can own cash, should be reasonably concentrated,” he said.
Although Chris Wood admits that with Sensex near all-time high it is certainly not a perfect time to start an Indian portfolio, he remains convinced of India’s stock market. Among the primary bets in his new portfolio is the Real Estate space with 17% weight. “GREED & fear remains convinced that India is at the start of a new housing cycle after a seven-year downturn, after the mother of all consolidations in the developer industry, which is why there will be a 17% weighting in the property sector,” he added.
India long-only portfolio, by Chris Wood: Full list of stocks with weightage
-Reliance Industries Ltd (RIL) – 10% weight
-Oil & Natural Gas Corporation Ltd. (ONGC) – 10% weight
–ICICI Lombard General Insurance Company Ltd – 8% weight
-ICICI Bank Ltd – 7% weight
-Housing Development Finance Corporation Ltd (HDFC) – 7% weight
–Bajaj Finance Ltd – 7% weight
-ICICI Prudential Life Insurance Company Ltd – 7% weight
-Maruti Suzuki India Ltd – 5% weight
-Jubilant FoodWorks Ltd – 5% weight
-State Bank of India – 4% weight
-DLF Limited – 4% weight
-Tata Steel – 4% weight
-Godrej Properties – 8% weight
-TVS Motor Company Ltd – 5% weight
–Container Corporation of India Ltd – 4% weight
-Century Textiles & Industries Ltd – 5% weight
Other Asian markets with dedicated long-only portfolios include China and Japan. Unlike the Asia portfolio, the newly crafted India one will have 16 stocks instead of 21. Since inception the Asia portfolio is up 3,266% compared to 746% increase in MSCI’s AC Asia ex-Japan index. The portfolio has assigned 12% weightage to India against 9.8% in the MSCI index. “The portfolio is now 31% invested in India and 27% in China, with another 25% allocated to Taiwan and Korean technology. The portfolio continues to be primarily geared to the domestic demand story in Asia,” Chris Wood said.
