This comes months after the money manager increased the weightage of India in his long-only Asia ex-Japan portfolio and at a time when Indian benchmark indices are ruling at all-time highs and valuations are looking stretched.
“This is certainly not the perfect time to start an Indian portfolio since the Sensex is near an all-time high, and so are many other stock markets. Still,
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,” said Wood.
That is the reason he has allocated 17 per cent to real estate stocks — , Century Textiles and — in his newly launched portfolio. Financials and energy sectors are the other two sectors that have large weightage in the portfolio.
India has nearly always had a significant representation in
GREED & fear’s long-only Asia ex-Japan portfolio, launched nearly 19 years ago. Wood said he would have liked to add more stocks to that portfolio but that 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.
The Indian portfolio has been put together in consultation with Jefferies’ head of India research Mahesh Nandurkar, and will start off with 16 stocks compared with 21 stocks currently in the Asia ex-Japan long-only portfolio. The India portfolio cannot own cash.
“This portfolio will be domestic demand-focused, though it will have a decent energy weighting to hedge, in part at least, the obvious risk of a higher oil price on Indian financials and other interest rate sensitive sectors.
GREED & fear remains bullish on oil,” said Wood.
Meanwhile, he said stock markets are in a ‘wait and see’ mode ahead of Friday’s US employment data. He advised investors to pay at least as much attention to the wage data as to job growth.
Data on Thursday showed the number of Americans filing new claims for unemployment benefits fell more than expected last week, while layoffs plunged to a 21-year low in June.
