Subramaniam pointed out that expecting more than 12% returns may not be realistic, as very few businesses consistently generate over 15% return on capital over long periods. He emphasised the need for practical expectations when it comes to equity investments.
While equities can offer 12% returns, achieving higher returns requires either strong stock-picking skills or smart asset allocation. This means investing in an asset class when market sentiment is negative and pulling back when valuations are high and markets are expensive.Read Here | Kotak’s Sanjeev Prasad still sees froth in market, expects 15% FY26 Nifty growth
Subramaniam believes that largecap stocks are currently valued within a fair range, making them a reasonable option for investors looking to allocate funds. While they are not cheap, they are still within comfortable levels.Mid and smallcap stocks as more expensive, with midcap valuations standing out. These stocks are trading at a record premium both compared to their historical levels and relative to the Nifty, he added.
Subramaniam advises investors to focus on long-term performance rather than yearly returns. He suggests evaluating returns over rolling periods of five to ten years, as this approach provides a clearer picture of investment outcomes.
He recommends investors to consider the hybrid set of funds, as they offer a balanced mix of equity and fixed income. The proportion of each varies depending on the fund category, but the appeal lies in the stability provided by fixed income, which generates a positive return above inflation, while also limiting full exposure to equities.
Hybrid funds are a suitable option for investors looking to make lump sum investments.
UTI AMC remains optimistic about the banking and financial services sector, citing attractive valuations.
Also Read | Invesco MF’s Taher Badshah sees government support as key to driving consumption
(Edited by : Shweta Mungre)
