Domestic funds moving to mid cap & cyclical stocks: Vijai Mantri

In a chat with ET Now, Vijai Mantri, Managing Director & Chief Executive Officer, Pramerica Mutual Fund, shares his views on cyclical stocks.


ET Now: What is the sense that you are getting about local fund buying that we are now seeing into high beta pockets, the likes of real estate as well as metals which has been evident at least in yesterday’s trading session, now these pockets that you would venture in or stay away purely because of the volatility or rather volatile nature of these sectors?

Vijai Mantri: You are right that lot of money, domestic money and particularly smart money may be moving towards cyclical or under mid and small cap segment and the reason is very simple that where is a big PE expansion is going to come by and definitely they are going to come by in the cyclical. But, the way we have looked at our portfolio is that if you look from a valuation perspective many of these stocks look. The thing is that a lot of these stocks depend on what happen on the policy front if there is no clarity which we do not see going to happen over next till the next general election we would be comfortable missing out on 10-20% immediate gain. If you look at getting more clarity on many of these stocks because in our opinion these stocks are not 20-30% kind of gain in the stock, they are two to three time kind of a stock so from our perspective we are right now not owning those stocks and actually we are underweight on the metal and many cyclical companies.