ETMarkets Smart Talk: This Columbia university alumni likes Adani Total Gas, P&G, and Nestle as top portfolio picks

“We are focused on Utilities and Consumer Staples. Some of the significant holdings in our portfolio are Adani Total Gas, P&G, and Nestle,” says Sandeep Tyagi, Founder & CEO, Estee Advisors.

In an interview with ETMarkets, Tyagi, an alumnus of IIT Delhi and Columbia University, said: “We are optimistic about Consumer Staples and Utilities. These are defensive sectors that would continue to do well despite global turmoil" Edited excerpts:

Where do you see markets headed in the short term?
Markets are being driven by some major themes, a few of which are multi-decade high inflation across the world, especially in Europe and the US and Russia-Ukraine war.

Both of these are the kind of issues that can have a major impact on the markets going forward and predicting either of them is almost impossible.

What is your take on the recent results from the IT sector for the quarter that ended in September? What is your preferred list?
We are underweighting in the IT sector at the moment. Though we like some of the names and carry them in our portfolio.

A couple of IT companies that we have a position in our KPIT Technologies, and Tata Elxsi.

What are your big themes for Samvat 2079? Where can investors look for wealth-creating opportunities?
We are optimistic about consumer staples and utilities. These are defensive sectors that would continue to do well despite global turmoil.

Till the time there is uncertainty the defensive sectors will continue to do well and our quant-based algos will keep being overweight in these sectors.

At the same time, we are underweighting in sectors like IT & Banking. As I mentioned earlier, we don’t know when the inflation and the Russia-Ukraine war will continue.

We follow a fully algorithmic approach which helps us construct our portfolios dispassionately.

Are Any stocks that you are looking for next Diwali?
In line with our views, we are focused on Utilities and Consumer Staples. Some of the significant holdings in our portfolio are Adani Total Gas, P&G, and Nestle.

Do you see fresh record highs for Indian markets in Samvat 2079?
Again, predicting precise levels is a fool’s errand. We stay away from that. We do look at 19 Macro indicators and decide whether we should lean more or less into the market.

Our current read of the macro situation is to be slightly overweight equities in India at this stage. Historically, in a market that is down in the last 12 months, the odds are in your favor.

The next 5-year returns are likely to be better than average 5-year returns.

What is your take on the rupee? Do you see further depreciation against the US Dollar in the next 12 months or Diwali 2023?
What we are seeing right now is not as much as the Rupee depreciating but the dollar strengthening. We have seen in earlier times as well that whenever there is a crisis, we see the US dollar strengthening.

Indian Rupee is one of the strongest-performing currencies among emerging economies. The few countries whose currencies have been doing well are the commodity-led economies, which would do well in this high inflation regime.

From an investment perspective, the rupee's weakness has to be weighed with the strength of underlying equity markets.

Our models indicate slight overweight in Indian equities versus all other markets that we track including the US, China, Brazil, and South Korea.

What are your key learnings from Samvat 2078 and any advice you would likely give investors for the next Samvat?
We had a fantastic run in the past 5-10 years, and the markets got a little ahead of the fundamentals. This happens frequently in the cycle of fear and greed. Investment is a marathon, not a sprint.

Steady systematic investments, instead of market timing, are the way to go. Investors who do well, in the long run, can ignore the noise in the markets and keep investing in a disciplined manner.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)