We drew a lot of flak for not participating in PSUs and defence in a big way: Swarup Mohanty of Mirae Asset

In a dramatic turn of events, the ruling BJP-led NDA coalition has faced electoral setbacks in its strongholds of Uttar Pradesh, Haryana, and Rajasthan. Despite these losses, the coalition is still expected to form the government with about 290 seats, although the BJP alone is projected to lead in around 236 seats. This situation raises pertinent questions for mutual fund investors and how mutual fund strategies might evolve. 

In an interview with Business Today TV, Swarup Mohanty, Vice Chairman and CEO at Mirae Asset Investment Managers (India) addressed these concerns, stating, “Life is not difficult for us because we do not prepare for any particular day. These are long-term structural stories, and finally, the story will prevail. On days like this, markets are tested.” 

Mohanty elaborated that liquidity remains robust, and corrections in stock prices due to selling pressures are anticipated. He stressed the importance of portfolio diversification over concentrated bets, which can lead to significant impacts. “Thankfully, our portfolio is diverse. We are not as shocked as we would be if we were concentrated,” he added.

Addressing their strategy, Mohanty revealed, “We find opportunities in private banks, consumption, healthcare, and leaders across market sectors. In the past, we drew a lot of flak for not participating significantly in PSUs and defence. We've been laggards in some of our performance, but we perceived overvaluation in these sectors and chose to stay out. Time will tell if we were right, but our stand remains the same; we continue to remain broad-based."

For new investors, Mohanty advises focusing on personal goals and existing portfolios rather than reacting to market swings. “What’s likely to happen is the normalisation of the market, which we've discussed for the last 6-8 months. People who make decisions based on short-term fluctuations often find themselves wrong in their future investing journey,” Mohanty concluded, suggesting more stable and sanitized investing ahead.

As the political landscape shifts, Mirae Asset remains steadfast, advocating for a diversified and prudent approach to mutual fund investing.