There was a decline in the market for the second consecutive week. The market has fallen more than 3% in the last 2 weeks. In such a situation, while talking about the further outlook of the market and MIRAE ASSET SMALL CAP NFO Varun Goyal, Senior Fund Manager, Mirae Asset Mutual Fund Said that every 4 years there is a slight correction in the market. Currently, the phase of consolidation and correction is going on in the market. There will be a good recovery in the market from next year. This year will also be one of correction and consolidation. Still a correction of 5-7% is possible in Nifty. 2025 is the year to invest in good stocks. There is an opportunity to diversify the portfolio. Keep an eye on the budget, Trump’s inauguration.
Price and time correction took place in the market. The policy of the American government will be monitored. The impact of the slowdown in China will still be there and there will be a slight slowdown in the commodity space.
Now sectoral or stock specific market? Answering this question, he said that there will be further benefits in the export sector. Good prospects are visible in IT, Pharma, Chemical. There will be positive trend in capital goods and real estate. There is a possibility of better growth after 6-12 months of slowdown.
What is the aim of launching NFO? Answering this question, Varun Goyal said that 17-18% returns are possible in Nifty Small Cap Index. The last 20 years were great, the next 10 years will be good too. The risk perception of small caps is now changing. Small caps will benefit from sectoral growth. Better returns are expected in the next 5-6 years. Compounding will be beneficial in small caps.
He further said that there is no fund for those of 1 to 2 years. The fund is beneficial if you have a long term view. Excellent returns are possible in 5, 7 and 10 years. The fund will invest in companies with good valuation. The investment strategy is based on fast growing sectors. Minimum is 65% smallcap 35% mid-small cap. Currently 75 to 80% of the portfolio is in small caps. Allocation is 25-20% in mid and large caps. Will adjust the allocation when correction comes. 85 to 90% allocation is in small caps. 15 to 20% can be kept in mid and large caps. Small caps have a history of excellent returns. Strong returns are possible in the smallcap index in future also.
Talking about mid and small caps, he further said that the correction in small caps has been completed to a great extent. Slight correction possible in small-mid caps. Correction of 13 to 14% has been done. Some correction is expected now. However, it is difficult to predict the full extent of the correction. From a 10 year perspective, good returns are being seen in small caps. There is an investment option for buying a house and children’s education.
In which sectors investment will benefit
Varun Goyal said to keep an eye on chemical and energy segments. There is a lot of potential in renewable and solar energy. There are good investment opportunities in the financial sector. Currently, further correction is expected in PSUs. Valuations in PSUs had become very expensive. Valuations in PSU are expected to come down slightly. Strategy will be made only after correction in PSUs. Right now consumption is quite slow. Will have to wait for consumption to increase. Some revival in consumption is possible after April. Seeing the correction in corruption, further investment will be considered.
Market This week: Continuous selling by FIIs created pressure, market closed on decline for the second week too, rupee hit new low
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