Mumbai, May 4 (PTI) DSP Blackrock today said despite volatility, the domestic equities will continue to remain the best performing asset class in the long run given the fast improving macroeconomic conditions.
“The country is well placed on growth and liquidity.
Macro conditions are improving, the entrepreneurial environment is positive, and there is good value creation potential in a host of businesses. We believe that equities will continue to be an asset of choice over the next decade.” DSP Blackrock mutual fund head for equities Anup Maheshwari told reporters.
According to him, average quarterly returns from domestic equities have been consistently strong especially in the five different periods of rising US bond yields over the past 25 years.
Maheshwari also said that with the Sensex delivering a total return of 24.6 per cent in a year, the Dalal Street have rallied in line with global peers. Also,it noted that the country is expected to be the third largest economy by 2030.
While, noting that most risks in the markets come unannounced and its difficult to predict the trigger, Maheshwari said in the long-run markets tend to follow corporate earnings and that “time spent in the market is more important than timing the market”.
Adding to this, DSP Blackrock president and chief investment officer S Naganath said in the current scenario geopolitical developments serve as possible risks to market movements and need to be tracked closely.
DSP Blackrock also noted that the improving macroeconomic scenario, political stability, on-track reforms and continued improvement in external balance sheet, has raised the country’s chances of possible rating upgrade.
“The rupee has been amongst the best performing currencies and has appreciated since the US polls and demonetisation as real rates have been around 3 per cent,” the mutual fund said.
“Foreign portfolio investors, who had reduced exposure to India after demonetisation as rates differentials came down, have invested more than Rs 60,000 crore so far in 2017 due to stable macros and the strong overall country balance sheet,” it added.
Commenting on the outlook for the fixed income market, its head for fixed income Pankaj Sharma said “the last one year has been quite eventful for the bond market but in the current market environment, fixed income schemes having average maturity between one and three years would benefit the most as the segment would have better accrual and limited risk during the holding period”.
This is published unedited from the PTI feed.