INSUBCONTINENT EXCLUSIVE:
NEW DELHI: Prashant Jain, CIO of HDFC Asset Management Company, on Thursday said a portfolio in which over one-third of the money is in
smallcap stocks is not advisable.
Speaking at an event in Mumbai, Jain said investors may invest one-fourth or one-third of their investible
income in smallcaps, and not more than that.
Bigger companies in every sector grows faster than their smallcap peers, Jain said, adding that
while size is a function of the nature of an industry, growth is a function of penetration of the industry
Smallcaps, Jain said, do not necessarily grow faster than largecaps.
Historically, smallcap stocks have traded at a meaningful discount to
Nifty Midcap and smallcap indices are down up to 30 per cent in last one year compared with a 3.53 per cent rise in Nifty50
Despite the recent slide, the indices have jumped 16.57 per cent and 12 per cent, respectively, against an 11.81 per cent rise in the
Nifty50.
Jain is bullish on industrials, as he sees clear signs of capex revival for India Inc
He said he is not so bullish on the consumer discretionary space, as it looks expensive and may see a slowdown going forward
In an interview with ET in December last year, Jain estimated that Nifty EPS growth for next few years will be in the mid- to high
teens.
He said he was not worried about the impact of elections on equity markets
said.
On Friday, he said the Indian market looks attractive on a market cap-to-GDP basis
He believes valuations of largecaps are reasonable to moderate at current levels
