In its annual note, DSP Mutual Fund revealed insights for a thoughtful portfolio approach in 2024. DSP advocates diversifying your portfolio across market cap segments to maintain a balance during different market conditions. In 2023, the global economy showed resilience, inflation cooled faster than expected, and companies retained most benefits of lower raw material prices, leading to higher margins. India’s positive sentiment continued, resulting in increased relative multiples.
DSP’s preference is towards quality midcap companies, as they provide a more effective approach to wealth creation with reduced volatility and fewer drawdowns. Understanding business cycles and valuations cycles in each sector becomes increasingly crucial going forward. Vinit Sambre, Head – Equities, DSP Mutual Fund, said, “Our goal remains – improving financial outcomes for our 3.5 MN existing investors while also welcoming new ones who can benefit from our simple and disciplined approach to achieving their financial goals.”
Recent data indicates improvements in operating performance, leading DSP to augment its holdings in PSU companies. DSP warns investors to be cautious in India due to a changing global landscape, including decelerating growth, rising interest rates, strong dollar, and geopolitical uncertainties. India’s domestic growth may make it less vulnerable to global macro risks, but expectations should be set based on the country’s rich valuations for the current year.
