5 Jan 2023
The new year is upon us, and we at Kotak Mahindra Mutual Fund will continue to work with you to help you secure financial freedom.
Let’s start with a basic building block of mutual funds – Systematic Investment Plans.
We have more than six crore SIPs in India which account for monthly flows of over 13000 crores. These flows are expected to sustain and strengthen the markets in 2023.
Moving on to a global perspective, India is not only at a valuation premium to its peers, but its premium is also higher than it has usually been. While this could lead to foreign flows moving to cheaper countries like China, Brazil etc, on a tactical or short-term basis, India can attract strategic or long-term valuations if it delivers on the three Gs of growth, governance and green, that is, earnings growth, governance standards and green commitment.
Sentimentally, global events such as the US Federal Reserve’s action on interest rates, the impact of the latest COVID wave in China on supply chains, and the geopolitical situation between Russia and Ukraine will impact markets.
The US Fed, one could say, is caught between the devil and the deep sea of high inflation and recession.
In the long term, economic fundamentals will remain the major driver for the markets, and rating agency S&P expects India to be the third largest economy by 2030.
However, we have some chinks in our armour – the biggest of these being a large trade deficit, and we need to use sam, dam, dund, bhed to control our trade deficit with China.
We must also make the business environment more conducive, which can help bring in more investment from the private sector.
Over the longer term, we also need to work on making India the manufacturing hub or the factory of the world, work on skilling people at the lower end of society, and invest in the healthcare sector.
All these can also help in decoupling the country’s fortunes from a deteriorating global situation.
As for 2023, investors must have a disciplined approach towards investing and maintain a balance between debt, equity, gold and real estate. For further details on asset allocation, you can refer to our blog here.
We wish you a happy and healthy 2023.
This article is for information purposes only. The information provided herein is derived from public sources, believed to be from reliable sources. However, no representation or warranty, express or implied, is provided in relation to the fairness, accuracy, correctness, completeness or reliability of the information, opinions or conclusions expressed herein. Views expressed herein involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied herein. Kotak Mahindra Mutual Fund/ Kotak AMC is not indicating or guaranteeing returns on any investments. Past performance may or may not be sustained in future. Readers should seek professional advice before making any investment-related decisions and alone shall be responsible for any decision taken.