A true global investment is investing across asset classes and countries, said Devina Mehra, Co-Founder and Chairperson of First Global.
Speaking at ETMarkets Global Summit 2021, Mehra said Indian equities account for just 2-3 per cent of the global equity markets and, thus, one must not restrict herself from 97-98 per cent of the opportunities.
Mehra said she has cut exposure to US debt, increased it to commodities, bought selective REITs and invested more towards Asian equities, in markets such as Japan, South Korea, Brazil and China in the last few months.
“A semiconductor in Taiwan has performed really well for us,” she said.
Mehra said market leadership changes year-to-year, and so does leadership in asset classes. “No matter how good a country or markets looks, there comes a time when your exposure to a single country causes a major problem,” she said.
Mehra noted that Asian markets got decimated post-Asian crisis, but European markets were up 25 per cent in the next one year. US treasuries also delivered a return of more than 20 per cent, she added.
In the case of the technology crash of 2000, US equities more than halved, but treasuries, oil and gold all delivered good returns, she said. Later, emerging markets (EMs) went up several times from 2003 to 2007, and oil, gold and other commodities also fared well, but returns from US equities were tepid, Mehra added.
In the last 10 years, emerging markets were in a bear market against a bullish run in US stocks, despite both being equities.
“There is nothing called a bull market or a bear market that holds true across the world. They always coexist,” she said.
For investing globally, Mehra advised investors to see if one’s asset manager has sound knowledge to dynamically and tactically change asset allocation. Mehra said that the RBI has a liberalised remittance scheme which allows it to remit a cumulative limit of $2,50,000 per person during a financial year. One can remit for investment purposes as well, among others, Mehra said, adding that First Global offers products starting at $10,000, which is roughly Rs 7.5 lakh.
“In the last few months, due to lockdown, a lot of people in India and globally, who had not been into trading at all, have got into it. They had a good run not just in Tesla, but other Nasdaq stock. You can consider it a beginner’s luck,” Mehra said.
She, however, said that one cannot stay up all night to track global markets while sitting in India. The skill element is not easy to come by, she added. “We started doing so just after Asian crisis. When we went overseas and found that the complexity presented by companies overseas is far greater than the ones in India,” she said.
Meanwhile, Mehra said she doubts if domestic equity investors could hear any good news in the forthcoming. She maintained that the medium-term outlook for India equities looks good. There are signs that trade is changing from the developed world to the developing world, she said, adding that the market had not performed well in the recent years.
