Time To Consider Alternatives To Equity, Says UTI AMC's Vetri Subramaniam

Investors should consider a multi-asset portfolio that includes fixed income and gold apart from equity holdings, according to UTI AMC's Vetri Subramaniam.

"It's time to shift your attention from 'TINA' to 'TARA," Subramaniam, chief investment officer at UTI AMC told BQ Prime's Niraj Shah. Investors should switch their strategies from 'there is no alternatives' to 'there are reasonable alternatives.'

With the Reserve Bank of India's long-term target inflation at 4% and supportive fiscal policy by the government, fixed income assets and bonds can't be ignored as they continue to offer yields at nearly 7.5%, he added.

"Looking at INR, gold versus the Nifty, (gold) is still placed in reasonably attractive territory," Subramaniam said.

Subramaniam looks for investing opportunities for medium to long term in companies and sectors where "profits have suffered and also valuations have derated".

Sectors including information technology, commodities and businesses facing Europe and China continue to suffer on the back of a global slowdown and unfavourable geopolitical circumstances, he said.

Amid the pandemic, businesses are ramping up IT spending that may aid the Indian IT space, according to him.

"These are companies where you are starting to see the valuations get a lot more attractive and including in some of these commodity businesses you've actually got companies with balance sheets much much stronger than where they used to be prior to this cycle," he said.

Meanwhile, stocks of domestic-facing companies have already priced in the growth expectations, he stated.

Manufacturing companies in India, he noted, may be a "long-term strategy" but won't be giving returns in the next six months to a year just because the government has incentivised it through production linked schemes.

Watch the full interview here: