How do MF investors build a portfolio in this market? Trupti Agrawal of WhiteOak Capital AMC explains

Are you worried about the current volatility in the stock markets due to escalating geopolitical tensions? In an interaction with Business Today, Trupti Agrawal, Fund Manager, WhiteOak Capital AMC, says prudent asset allocation is crucial for optimising long-term returns as it balances risk and reward across diverse investment categories.

She further adds that from a macro perspective, incremental news flow has been positive. GDP growth for Q4FY25 came in at 7.4%, ahead of expectations of 7.1%, with FY2025 GDP growth at 6.5%, and expected to be around similar levels in FY2026. Agrawal further shared her insights on where the market is headed and what investors should do right now? Edited excerpts:

BT: After hitting its 52-week low of 71,425 in April 2025, the index is now again hovering above 80,000 levels. How do you see the trend going ahead?

Agrawal: We have always believed that in the very near term the market is impossible to predict, hardly any different than a coin flip. Over the long term, markets worldwide have tended to deliver returns that are more or less in line with nominal GDP growth rate plus dividend yield. India’s nominal GDP growth rate is expected to be low double digits going forward and similar would be our expectation for the market return in rupee terms.

BT: In the current market environment, how a mutual fund investor can build a portfolio?

Agrawal: Concerns- whether global or domestic- are always present in the market; there's never a time without them. People naturally look for risks, and there will always be something to focus on. As we have mentioned elsewhere, it is important to seek advice from financial advisers to decide on the suitable asset allocation.

BT: Can you throw some light on your investment strategy and sectors which are looking attractive?

Agrawal: At WhiteOak, our investment philosophy is that outsized returns are earned over time by investing in great businesses at attractive valuations. To be considered great, a business should possess following attributes: (a) it should have superior returns on incremental capital, (b) should be scalable, (c) be well managed in terms of execution and corporate governance.

Our team is very stock selection driven. We do not make top down thematic or sectoral calls, as those are fraught with risk without adding to returns in our view. For the all-cap portfolio, from a bottom-up perspective, there are certain sectors where we consistently find more opportunities. Currently we see more promising prospects within private sector financials, consumer discretionary, communication services, and industrials. While not generalising, it is certain sub-segments and individual companies within them that find favour with the team.

BT: What are your key takeaways from the recent earnings season? What do you expect from FY26 earnings?

Agrawal: Broader earnings growth, though still tepid, managed to beat the expectations, which were marked down significantly lower over the last few months. Downgrades continued albeit at a slower pace. From a fiscal year perspective, balance sheet and debt metrics are stable. From quarter to quarter, there could be some volatility as consensus adjusts to estimates to reflect the evolving environment, but on aggregate basis, FY26 earnings growth expectations of 12% seems reasonable.

BT: What are the potential headwinds that could weigh on the domestic equity markets going forward?

Agrawal: From a global standpoint, the key near-term challenges at any point in time include any uncertainty related to evolving global geo-political situation, tariff-related uncertainty, sharp reversal in global markets and any spike in oil prices.

From a local perspective, we see the recent narrative around the growth slowdown as just a part of a normal business cycle. Over the years, there have been periods of slower economic and earnings growth, followed by times of faster growth. The domestic systemic liquidity position, which was challenging a few months back, seems to have eased significantly.

BT: What are the key drivers behind this outperformance of realty sector in the domestic equity market in FY26 so far?

Agrawal: The rally in real estate stocks has been driven by continued strong operating performance in terms of sales and collection activity. While FY2025 (esp. 1HFY25) saw some delays in launches impacting sales, FY2026 has started on a strong note. Sales numbers from big project launches by large listed developers have been reassuring. A large launch pipeline is likely to support the sales momentum as well. Inventory position remains comfortable as well.

BT: Can you share some insights into your top-performing funds and their performance since inception?

Agrawal: Since August 2022, we have launched 15 schemes, in line with our mission of providing best-in-class investment products to retail investors. Each of our schemes is in the top quartile by performance in its respective category. Within the broader equity basket, irrespective of the type of scheme – large cap, mid-cap or flexi-cap, attribution of our performance shows that alpha has been driven by stock selection which is considered to be a function of the team’s stock picking abilities.

BT: What is your advice to small investors?

Agrawal: The key for any investor is to seek advice from financial advisers to decide on a comfortable equity allocation and stick with it over time. Avoid speculative trading or constantly changing your strategy based on short-term market movements or media headlines.

BT: Do you have any views on gold, silver and debt funds?

Agrawal: Gold has generated very strong returns over the last 2-3 years but that may not necessarily be the case going forward. For an investor, Multi Asset Allocation Funds can be a good option. The product’s primary goal is to generate reasonable returns and maintain tolerable level of volatility, thereby achieving better risk-adjusted returns. In this regard, the WhiteOak Capital Multi Asset Allocation Fund has generated 17.7% CAGR since inception in May 2023, ensuring not just strong performance but a smooth and rewarding experience for our investors.