A $37 billion fund manager’s top bets after the market correction

Pharmaceuticals, healthcare, IT, and selective consumer discretionary stocks are among the sectors that can be looked at after the recent correction, according to Karthik Kumar, Fund Manager at Axis Mutual Fund (MF), which managed $37 billion in assets at the end of December.Kumar remains overweight on the pharmaceutical and healthcare sectors, along with selective consumer discretionary stocks.

However, he is underweight in staples, based on a bottom-up approach, and in commodities, where he sees limited upside potential.

Also Read | UBS expects double-digit Nifty returns over next 12 monthsThe IT sector has seen a sharp correction, in line with global trends, but Kumar remains slightly overweight, expecting it to perform well over the long run, particularly during periods of high volatility and a weaker rupee.

Meanwhile, cement demand has improved, supported by cooling input costs and increased government capital expenditure. With expectations of further government spending, Kumar sees potential in beaten-down sectors that have strong growth visibility.Kumar notes that largecap stocks have shown greater resilience than the broader market. However, the correction in midcap and smallcap stocks has been indiscriminate, creating potential buying opportunities in select areas, depending on market conditions and specific portfolio allocations.

Also Read | Consumer and financial stocks to lead next bull market

Kumar believes growth stocks with strong near-term earnings visibility could present good entry points if valuations turn attractive.

For the full interview, watch the accompanying video

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