Clear energy, healthcare, infrastructure, consumer goods, and defence are the 5 themes to bet on at this time, says RK Jha, MD, and CEO, of LIC MF

Clear energy, healthcare, infrastructure, consumer goods, and defence are the 5 themes to bet on says RK Jha, MD, and CEO, of LIC MF. He also shares how LIC will achieve its target of Rs 1 lakh crore AUM for this financial year. He also advises investors on how current market conditions call for a balanced approach with a multi asset strategy. “In the current dynamic global environment, multi asset allocation fund is advised as it enables investment across different asset classes comprising equity, debt, gold and silver and can help in generating stable income. In equity side, one can also look at multi cap and value funds.” he says.

Net inflows into equity mutual funds declined by 3.2% month-on-month to ₹24,269.26 crore in April, per the data released by the Association of Mutual Funds in India. This inflow, worth nearly $3 billion, is the lowest since April last year, and has declined for four months in a row.

Despite the dip in equity inflows, the mutual fund industry’s total assets under management (AUM) touched a new record high of Rs70 lakh crore in April, up from ₹65.74 lakh crore in March. In April, investor sentiment appeared to shift within the equity mutual fund space, with inflows into midcap and small cap fund categories experiencing a decline, even as large cap funds saw renewed interest.

Edited excerpts-

Which sectors are you bullish on and bearish on, and why?

Certain sectors are poised for steady growth driven by the continued energy transition, growing digital innovation and adoption, infrastructure development coupled with the government’s reform-led policies. Clean energy is expected to benefit from continued capacity additions, while the healthcare sector is likely to see momentum driven by greater healthcare awareness and the adoption of digital health solutions. Infrastructure is also expected to gain from increased investment in housing and urban development, and the consumer goods sector stands to benefit from an uptick in consumption trends. Lastly, defence may also see a resurgence considering the government’s focus on “Make in India” products to reduce reliability on imports.

Having said that, investment sentiment is expected to remain subdued in sectors like IT, oil and gas due to industry-specific concerns and structural headwinds.

 

Which fund category can be suitable for investors in the equity space?

Investors can look at multi asset allocation fund as it enables investment across different asset classes comprising equity, debt, gold and silver to generate stable income in today's dynamic global environment. The investor may also look at value fund as fundamentally strong companies with intrinsic value in current volatile market situation could be a winner in long run and also multi cap fund.

 

What are your views on key market triggers like U.S. tariffs and their potential impact? Also, how do you see FII flows shaping up, particularly with regard to investments in India? 

India and the US are currently working towards finalising a multi-sector bilateral trade agreement (BTA) and we will get clarity in a few days. The 90-day tariff pause and the prospect of BTA with the US have helped the markets overcome the near-term worries. Having said that, it remains to be seen how the US-China trade deal will impact the India’s competitive advantage in the manufacturing sector. Also, Foreign Institutional Investors (FIIs) emerged as net buyers for the first time in four months. This renewed momentum is a positive for our economy and establishes the fact that domestic fundamentals are robust.

 

What’s your view on gold and silver?

Gold being a safe haven asset is always a potent hedge against market uncertainty and inflation. In this era of accessibility and convenience-led digital economy, the emergence of digital gold has made it affordable for investors to accumulate the yellow metal over time. On the other hand, silver being a precious and industrial metal acts as a portfolio diversifier as well. Weakening dollar and varied industrial applications have made the silver price outlook strong.

 

 

How do you plan to scale the AUM to 1 lakh crore, as that is the target for this financial year?

We have undertaken several strategic initiatives to further strengthen our market presence. Leveraging the extensive network of the Life Insurance Corporation (LIC), we are expanding our office footprint. Simultaneously, we are building robust distribution channels across multiple platforms and integrating advanced technological solutions to enhance accessibility. Additionally, to encourage broader retail participation, we have launched Pocket SIP lowering daily SIP to Rs 100, monthly SIP to Rs.200 and quarterly SIP to Rs 1000.

 

What’s your rationale on re-launching few funds specifically?

We have reintroduced our five flagship equity schemes - LIC MF Value Fund, LIC MF Small Cap Fund, LIC MF Multi-Asset Allocation Fund, LIC MF Dividend Yield Fund and LIC MF Focused Fund to boost our product offerings, attract new investors, and align the funds with changing market dynamics. All of these funds except LIC MF Multi Asset Allocation Fund were merged on acquisition of schemes of IDBI MF. The investment objectives of these funds are aligned with the aspiration of the young as well as new investors. These funds will cater to the varied financial goals and strive to deliver strong returns in spite of challenging market conditions.

 

What’s your advice for investors at this time?

For investors, staying invested with a long-term view, diversifying portfolios and assessing their risk appetite can be beneficial. SIP’s can be a useful wealth engine to build handsome amount over a longer duration as it brings discipline in savings habit, allows rupee cost averaging and power of compounding. This helps in accumulating large no. of units and which in turn helps in building up wealth. Thus, adopting a disciplined approach and regularly reviewing asset allocation strategies can help navigate market volatility with ease. A balanced approach, considering market dynamics and individual goals, will be essential for successful investing and achievement of financial goals.