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Market in mature phase of bull; closed-ended funds to play a key role, says S Naren


Watch full interview of S Naren with CNBC-TV18.

Historically, March has been a good month to invest with a tactical view and there is a scope for pop in April.  May can be a scope for trading rally, says S Naren, ED & CIO, ICICI Prudential.
According to him, a 5-10 percent correction does not necessarily make the market cheap, the smallcaps and midcaps still continue to be overvalued.  However, the largecaps are more reasonably valued than the smallcaps and midcaps.
Globally, we are entering an environment where interest rates are going up in US and could stop going down in Europe and Japan, which is not a positive scenario. Hence, there is scope for volatility over the next 12-18 months.
However, for a long-term investor with a time frame of around 5 years, this is a good time to invest, said Naren.
Speaking about their new Bharat Consumption Fund series, he said that usually in a phase before elections, consumption is a good theme to invest in, especially now when the government is likely to give a big thrust to consumption in the next 12-18 months. Moreover, it is a structural sector in the long run because people will continue to consume things like detergent, toothpaste, medicines etc.
According to him, there will be lot of volatility in this space going forward, so a closed-end fund can make use of that and pick good corporate governance stories with a medium-term objective.
Sharing his rationale for believing in a closed-ended fund, he said that these funds have the capability to stay in cash during periods when markets are costly.
"Over the next many years, closed-ended funds will have a role to play since most investors are no savvy and they don’t have the expertise to invest on market low and get out on market high", he said.
He said that the Bharat Consumption Fund was a multi-sectoral fund with both defensive and aggressive sectors as part of the theme.
He is of the view that we are in a mature phase of the bull market barring earnings.
"The house is upbeat on Balance Advantage Funds, Credit Funds and Dynamic Funds", said Naren.

Market Movers

ITC209.30 -3.20
Bajaj Auto4,179.90 -44.60
Eicher Motors2,705.05 -24.00
UPL838.70 -6.85
Adani Ports846.75 -5.85
Bajaj Auto4,179.95 -42.35
Maruti Suzuki7,199.15 -40.85
HCL Tech968.50 -3.35
UltraTechCement6,706.00 -18.70
Power Grid Corp241.55 -0.45
Bajaj Finance6,086.40 411.90
Bajaj Finserv11,993.10 434.25
SBI432.25 10.80
Divis Labs4,372.55 105.10
IndusInd Bank1,024.35 20.80
Bajaj Finance6,087.60 413.45
Bajaj Finserv11,991.60 432.95
SBI432.25 10.80
IndusInd Bank1,023.65 20.25
Dr Reddys Labs5,290.65 68.80


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