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market | IST

SBI MF increases passive investment in power sector on economic revival hope

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When economic recovery kicks in, value stocks tend to benefit, said Gaurav Mehta, Fund Manager and Equity Strategist at SBI Mutual Fund in an interview with CNBC-TV18.

When economic recovery kicks in, value stocks tend to benefit, said Gaurav Mehta, Fund Manager and Equity Strategist at SBI Mutual Fund in an interview with CNBC-TV18.
“From that point of view, power is a pocket that fits in well, it is providing you that good value, good dividend yield, so there is in-built safety with respect to higher dividend yield,” he added.
"In a passive fashion, we have been buying in the power sector," he added.
Mehta also weighed in on the impact of macros on the market saying that there is strong coordination where fiscal policy is very aggressive and monetary policy staying accommodative to provide more space for that fiscal aggression.
"I think that combination is giving investors hope that the global economy will come out of its current track and you will see a sustained pick-up in growth and inflation going forward,” he shared.
Sectorally, Mehta is betting on autos, private lenders and high cyclical stocks. The belief is that there will be a kickstart in the economic cycle as well as the investment cycle over the next few quarters.
"We are parking ourselves in these high-quality cyclicals whether they are from the industrial and manufacturing space or they could be large better-capitalized lenders or they could be some sort of commodity plays or some names from automobiles and discretionary consumption which will benefit as the economy starts to reopen,” he explained.
For the full interview, watch the accompanying video