In 2018, we had seen a sharp fall in the markets due to heightened volatility driven by both global macroeconomic developments and domestic events. However, we have seen a rapid recovery this year till date.

The world’s major Central Banks have become dovish and Emerging Markets now have space for policy easing which should give a boost to their economies.

External stability is less of a concern now with crude prices and Rupee being range-bound. The fiscal deficit is being managed and monetary policy is easing, as seen in the Reserve Bank of India (RBI) cutting its policy rate by 25 bps.

The rural economy has been under some stress but election spending and Direct Benefit Transfer (DBT) should give a stimulus to rural consumption in the short term.

Outlook

We remain constructive on India’s overall economic growth going forward and expect broader earnings growth for the market to remain supportive. Investors may continue to build equity exposure for the long term.

Select themes that we are participating in are Consumption (i.e. Consumer and Consumer Discretionary), Financials (i.e. Private Banks, Corporate Banks and select NBFCs), and Industrials (i.e. Capital Goods).

Source: ABSLAMC Research, Bloomberg, Financial Express, Mint

Portfolio Action

Aditya Birla Sun Life Balanced Advantage Fund (An open ended Dynamic Asset Allocation fund):

During the month, added weights in Non-Banking Financial Company (NBFC) names. Also added some shares in Cement stocks on expectations of Infra spend and reducing input prices. Current portfolio, on equity side is more large cap biased but shall take exposure to selective midcaps at opportunistic levels.

Aditya Birla Sun Life Equity Advantage Fund (formerly known as Aditya Birla Sun Life Advantage Fund) (An open ended equity scheme investing in both large cap and mid cap stocks):

The fund currently has exposure to 61 stocks. Overweight on Financials and Consumer Goods stocks while being underweight on IT due to appreciating rupee. Added some weight in an Indian Housing and Rural finance company, reduced positions in an Indian food-products corporation and an India motorcycle manufacturing company.

Aditya Birla Sun Life Frontline Equity Fund (An Open ended equity scheme predominantly investing in large cap stocks):

Currently overweight on Financials while being underweight on IT, Auto. Within Financials, currently bullish on corporate banks. Well diversified portfolio with exposure to 65 stocks currently. Increased exposure to an automobile manufacturer, Public Sector Undertaking (PSU) and public Sector banking due to reasonable valuations.

All the Data mentioned above is as on 31st March 2019

The scheme(s) may or may not have any present or future positions in these sectors.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.