India outperformed other Emerging Markets in May, 2019. On the global front, US-China trade tensions re-escalated in May, with negotiations breaking down and tariffs being raised by both sides.
While increased uncertainty has led to some Emerging Markets seeing Foreign Portfolio Investor (FPI) outflows in May 2019, India saw an inflow as FPIs continued to correct their light positioning.
With slowing growth and inflation below target, the Reserve Bank of India (RBI) cut its policy rate by 25 bps and also changed its stance from neutral to accommodative confirming further scope of rate cuts in the future.
The crude oil prices have seen a significant decline. This should keep both inflation and current account deficit in check.
On the Investments side, private capex which typically slows down 1-2 quarters before elections, may also pick up post elections.
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, AMFI
Aditya Birla Sun Life Frontline Equity Fund (An Open ended equity scheme predominantly investing in large cap stocks):
The Fund is currently overweight on Financials, Pharma and Construction while being underweight on IT. Within Financials, currently bullish on corporate banks as compared to retail banks earlier. Added an Indian pharmaceutical company to the portfolio, also increased exposure to a PSU, private bank and an Indian telecommunications company.
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 is overweight on Financials, Consumer Discretionary and Cement while being underweight on IT due to muted growth outlook. Increased weight in an Indian oil and natural gas company and an Indian chemical conglomerate.
Aditya Birla Sun Life Balanced Advantage Fund (An open ended Dynamic Asset Allocation fund):
During the period, added an electric utilities company, a cement manufacturer and a consumer goods company. Increased weight in an Indian conglomerate and an Indian electric utility company. Current portfolio is large cap biased.
All the Data mentioned above is as on May 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.