Indian Equity markets touched an all-time high at the beginning of June. The markets then took a breather, as all eyes were on the Union Budget for FY19-20.

The US Fed le interest rates on hold and signalled a strong bias to lower rates in the near future. Consequently, global equities have got a boost.

The budget announced on July 5th ticks the right boxes as it focuses on policy continuity and sustainable growth while not compromising on fiscal consolidation and macro stability.

India’s sovereign external debt to GDP is among the lowest globally at less than 5%. The government is also looking to raise a part of its gross borrowing program in external markets in foreign currencies.

Outlook

The government’s initiatives may likely take 6-12 months to reflect in growth. Given this, there is a possibility that the market may consolidate and provide opportunities to invest in Indian equities in the near term.

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

Source: ABSLAMC Research, Bloomberg

Portfolio Action

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

During the month, added an Indian conglomerate & an Indian Pharma company. Reduced weight in a bearing and seal manufacturing company and a pharmaceutical company. Current overweight Cements, Metals, Industrials and underweight Energy.

Aditya Birla Sun Life Focused Equity Fund (formerly known as Aditya Birla Sun Life Top 100 Fund) (An Open ended Large cap Equity Scheme investing in maximum 30 stocks):

The fund is overweight on Financials, Healthcare and Construction while Underweight on Energy, IT and Auto. During the Month, the fund took fresh position in an Indian commercial vehicle finance company. Continue to add an Indian private bank and a pharma company to the portfolio.

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):

Overweight on Financials, Consumer Discretionary and Cement while being underweight on IT, FMCG & Energy. Took fresh positions in an Indian hypermarket chain & an Indian hospital chain, also increased weight in a natural gas company.

All the Data mentioned above is as on 30th June 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.