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Economic Times
5 days ago
- Business
- Economic Times
Fixed Income is portfolio's seatbelt against volatility: Chakri Lokapriya of LGT Wealth India
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel In this edition of ETMarkets Smart Talk, Chakri Lokapriya, CIO – Equities at LGT Wealth India , explains why fixed income should be viewed as a critical stabilizer in any investment portfolio Comparing it to a 'seatbelt' that quietly cushions against market volatility, Lokapriya highlights the importance of allocating 20–30% of portfolios to high-quality bonds , especially in today's uncertain global believes fixed income is not just about safety but about steady compounding and risk management, making it a foundational element in long-term wealth creation. Edited Excerpts –A) The scene is the place for a lovely outcome of markets moving higher, and closing CY2025 with a 10% to 12% gain. However, the big elephant in the room is US Tariffs India is expected to conclude the talks by the end of July 2025. And it is evident that India would not budge on allowing access to US agricultural or dairy products, as it is detrimental to the livelihood of 60% of India's farmers.A tariff deal without the above two items is the big event to watch for and markets would take a decisive directional move based on the outcome of the U.S. Tariff deal with India.A) We are running well diversified portfolios with good earnings we are taking a balanced approach in rebalancing portfolios to volatile decisions such as raising and lowering tariffs.A) 2020 was a watershed moment for India's corporate in managing cash flows and maintaining sufficient liquidity to counter uncertain 2020, many Indian companies have balanced capital expenditure versus profit growth admirably a number of Sunrise sectors, old-world in many respects such as Defence, Railways, Semiconductors are structurally allowing Corporate India's profits to growth faster than the GDPA) In Electronics and Semiconductors: growth is Fuelled by import substitution ,PLI. US and Europe shifting sourcing from China to is the leader in Electronics System Design and Manufacturing (ESDM), (40% of output and 30% of exports). India stands at 2% therefore huge room to rising share of electronic content across automobiles, CD, Industrial translates into a higher addressable market for EMS. India semiconductor market size to surpass $55 bn by electronics market is at $150 bn, to grow to $500 bn and create 6mn jobs by 2030. PM Modi's goal 100% of electronic manufacturing in India.A) In an uncertain world, fixed income is your portfolio's seatbelt—quiet, steady, and critical when volatility hits. Allocating 20–30% of your portfolio to bonds can help cushion equity swings and deliver a reliable environment of moderating rates and strong credit spreads makes this a smart time to lock into high-quality instruments, such as government bonds, AAA corporates, and select high-yield of it as earning while you wait—letting your capital work quietly in the background. The goal isn't just safety—it's smart, steady compounding through cycles. In a well-built portfolio, fixed income isn't optional—it's foundational.A) Energy as a sector will be in the spotlight in 2H2025. India with 1.4 billion population, urbanization, 22 GW by 2032, net-zero by 2070. Retrofitting coal-fired plants for efficiency and nuclear energy, targets of 500 GW by 2030 (50% non-fossil fuel electricity), with PLI, waived transmission charges, National Solar Mission, Hydro and Wind. Nuclear power generation target of 100 GW by managing solar and wind energy, Battery energy storage systems (BESS) demand to reach 60 GW by 2030. India's abundance in thorium, uranium, solar, and wind reduce import dependency.A) Yes Indeed, India was and is a stock pickers market with over 6,000 companies to select from. We aim to look for stocks that have strong earnings visibility due to an acceleration of business, recovering balance sheets.A) Past two years have had multiple war-like situations and the US too joined the the tariff has left countries finding ways to control inflation. Against this backdrop, Gold continues to be a hedge against inflation and an investment vehicle.A) The cumulative 100bps rate cut significantly reduces borrowing and working capital costs, especially for capital-intensive sectors like power utilities (thermal/renewable) and spending is poised to benefit ahead of the upcoming budget, potentially accelerating revenue growth by 12–18%. The mid cap sector is expected to grow at 17% to 20% outpacing 8% to 10% growth of the large cap.A) Telecom as a sector has huge levels of debt, and regulatory and court interventions and therefore remain cautious.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)


Time of India
5 days ago
- Business
- Time of India
Fixed Income is portfolio's seatbelt against volatility: Chakri Lokapriya of LGT Wealth India
In this edition of ETMarkets Smart Talk, Chakri Lokapriya, CIO – Equities at LGT Wealth India , explains why fixed income should be viewed as a critical stabilizer in any investment portfolio . Comparing it to a 'seatbelt' that quietly cushions against market volatility, Lokapriya highlights the importance of allocating 20–30% of portfolios to high-quality bonds , especially in today's uncertain global environment. He believes fixed income is not just about safety but about steady compounding and risk management, making it a foundational element in long-term wealth creation. Edited Excerpts – Q) Nifty closed with marginal gains in June, but for the first six months of 2025, it is up over 7%. How do you see markets for the rest of FY26? Any big events to watch out for? A) The scene is the place for a lovely outcome of markets moving higher, and closing CY2025 with a 10% to 12% gain. However, the big elephant in the room is US Tariffs . 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And it is evident that India would not budge on allowing access to US agricultural or dairy products, as it is detrimental to the livelihood of 60% of India's farmers. Bonds Corner Powered By India bonds seen steady ahead of RBI's debt sale, liquidity moves Indian government bond yields are anticipated to remain stable as traders await the weekly debt auction. The central bank's substantial liquidity withdrawal operation is fostering investor caution. Rate cut bets have increased following a drop in retail inflation, while shorter duration overnight index swap rates are expected to experience paying pressure due to the RBI's cash withdrawal. Why did RBI accept 79% of buyback bids despite high demand? Japan bonds tread water as wary investors await weekend election ETMarkets Smart Talk | Fixed Income is portfolio's seatbelt against volatility: Chakri Lokapriya of LGT Wealth India RBI plans bond switch to ease redemption load Browse all Bonds News with A tariff deal without the above two items is the big event to watch for and markets would take a decisive directional move based on the outcome of the U.S. Tariff deal with India. Q) How are you managing the volatility in your portfolio? Any key learnings which you would like to share from 1H2025? Live Events A) We are running well diversified portfolios with good earnings visibility. Furthermore, we are taking a balanced approach in rebalancing portfolios to volatile decisions such as raising and lowering tariffs. Q) One of the reports suggested that India Inc.'s profits have grown nearly 3x faster than GDP since FY20. What structural factors are driving this divergence? A) 2020 was a watershed moment for India's corporate in managing cash flows and maintaining sufficient liquidity to counter uncertain periods. Since 2020, many Indian companies have balanced capital expenditure versus profit growth admirably well. Moreover, a number of Sunrise sectors, old-world in many respects such as Defence, Railways, Semiconductors are structurally allowing Corporate India's profits to growth faster than the GDP Q) With the China+1 theme gaining traction, which Indian sectors are best placed to attract global capital and scale? A) In Electronics and Semiconductors: growth is Fuelled by import substitution ,PLI. US and Europe shifting sourcing from China to India. China is the leader in Electronics System Design and Manufacturing (ESDM), (40% of output and 30% of exports). India stands at 2% therefore huge room to grow. The rising share of electronic content across automobiles, CD, Industrial translates into a higher addressable market for EMS. India semiconductor market size to surpass $55 bn by 2026. India's electronics market is at $150 bn, to grow to $500 bn and create 6mn jobs by 2030. PM Modi's goal 100% of electronic manufacturing in India. Q) How is fixed income as an asset class looking for long-term investment? How much money should one allocate as a hedge to combat volatility? A) In an uncertain world, fixed income is your portfolio's seatbelt—quiet, steady, and critical when volatility hits. Allocating 20–30% of your portfolio to bonds can help cushion equity swings and deliver a reliable income. Today's environment of moderating rates and strong credit spreads makes this a smart time to lock into high-quality instruments, such as government bonds, AAA corporates, and select high-yield credits. Think of it as earning while you wait—letting your capital work quietly in the background. The goal isn't just safety—it's smart, steady compounding through cycles. In a well-built portfolio, fixed income isn't optional—it's foundational. Q) Which sectors are likely to remain in the spotlight in 2H2025? A) Energy as a sector will be in the spotlight in 2H2025. India with 1.4 billion population, urbanization, 22 GW by 2032, net-zero by 2070. Retrofitting coal-fired plants for efficiency and nuclear hubs. Renewable energy, targets of 500 GW by 2030 (50% non-fossil fuel electricity), with PLI, waived transmission charges, National Solar Mission, Hydro and Wind. Nuclear power generation target of 100 GW by 2047. For managing solar and wind energy, Battery energy storage systems (BESS) demand to reach 60 GW by 2030. India's abundance in thorium, uranium, solar, and wind reduce import dependency. Q) Can we say that we are in a "stock picker's market" ahead? If yes, what are the key traits investors should look for in FY26 picks? A) Yes Indeed, India was and is a stock pickers market with over 6,000 companies to select from. We aim to look for stocks that have strong earnings visibility due to an acceleration of business, recovering balance sheets. Q) Gold has also seen a tremendous run in 2025 – how do you see the yellow metal shining in 2H2025? Time to book profits or add on dips? A) Past two years have had multiple war-like situations and the US too joined the conflict. And the tariff has left countries finding ways to control inflation. Against this backdrop, Gold continues to be a hedge against inflation and an investment vehicle. Q) How should one play the small & midcap theme? Has the profitability improved compared to large caps? What does the data suggest? A) The cumulative 100bps rate cut significantly reduces borrowing and working capital costs, especially for capital-intensive sectors like power utilities (thermal/renewable) and mining. Infrastructure spending is poised to benefit ahead of the upcoming budget, potentially accelerating revenue growth by 12–18%. The mid cap sector is expected to grow at 17% to 20% outpacing 8% to 10% growth of the large cap. Q) Any sector that is running out of steam and investors should carefully pare their positions? A) Telecom as a sector has huge levels of debt, and regulatory and court interventions and therefore remain cautious. ETMarkets WhatsApp channel )


Mint
22-06-2025
- Business
- Mint
Investors shift to European markets as Trump tariffs, economic data fuel uncertainty in US stocks, says LGT's Advani
For over a decade, the US market and growth stocks have dominated most portfolios, with the magnificent 7 stocks giving outsized returns to investors. However, the US is currently facing a confluence of challenges and there has been broad weakness in US assets, as equities, bonds and the US dollar have weakened this year. Tariff-induced inflation, fiscal imbalances, and signs of labor market cooling are contributing to an environment of heightened uncertainty and instability. With this backdrop, investors have started to look beyond the US, with Europe seeming like a preferred market for multiple reasons. The valuation of European equities remains undemanding, even after the run up this year. Governments are ramping up spending on infrastructure and defence, and this fiscal regime shift should benefit companies in construction and materials, real estate, telecom and utilities. Germany has taken a lead in fiscal stimulus by announcing a EUR 500 billion spend to bolster national security, infrastructure development and green transition. This could spread further across Europe. De-escalation of US-China trade tensions is a positive for Europe which has significant exposure to both US and China. European banks have strengthened their capital bases due to robust earnings in recent years, and are well-positioned to navigate the recalibrating European economy. Likewise, European insurance companies maintain stable income streams and strong solvency ratios. This offers substantial buffer to mitigate potential impacts from geopolitical uncertainties. The strengthening fundamentals of European regions demonstrated through Q1 company earnings beat (57% of the companies reported earnings beats, the fifth straight quarter of above long-term average proportion of beats) also support the investment case for European equities. While EPS revisions have faced pressure due to trade policy uncertainties and global macroeconomic concerns, the trend appears to stabilize as tensions ease. The European Central Bank has cut interest rates 8 times in a year, acknowledging that inflation is in control and within reach of it's 2% target. The Euro has strengthened over 10% against the dollar this year and is close to a 3-year high, signalling optimism toward the European economy. In conclusion, renewed interest in European equities is being driven by both domestic and international capital flows, signalling growing confidence in the region's prospects. Additionally, international investors are diversifying away from US assets due to factors like policy uncertainty and tariff risks, further boosting capital inflows into European markets. The author, Nikhil Advani, is the Managing Director of International Business at LGT Wealth India. Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making investment decisions.


Economic Times
28-04-2025
- Business
- Economic Times
ETMarkets Smart Talk: Investor bearishness at highest levels since 2009, says Chakri Lokapriya
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel In this edition of ETMarkets Smart Talk, Chakri Lokapriya , CIO - Equities at LGT Wealth India, shares his insights on the current market turbulence triggered by the US tariffs on global points out that fear, rather than valuations, is driving market sentiment, with investor bearishness at its highest levels since discusses the potential impact on India's economy , sectors to watch amid global uncertainties, the outlook for corporate earnings , and how investors — both domestic and foreign — are positioning themselves in these volatile times. Edited Excerpts -A) The markets resumed their fall on the 3rd of April due to the US imposing Tariffs on goods imported from 180 countries into America. The tariffs were imposed to lower trade imbalances and deficits in the U.S.A. Markets fear that Trump's tariffs could raise US inflation, pulling down economic growth worldwide. Fear is the driving force in the market rather than valuations. The 90 day pause on tariffs gives countries to reach bilateral agreements with the US and hence FY26 is likely to be very volatile.A) The Indian Govt is among 6 out of 180 countries that have offered concessions on US imports into India and would viewed positively by Trump.A) Indian Govt sources indicate a 90-day pause. Until then, 10% tariffs Goel, Minister of Commerce, leading a team working with the US Govt to arrive at a bilateral agreement. However, in the interim GDP growth is likely to slowdown by 30 to 50 bp.A) With Gold at all time highs, it is recommended to have a neutral allocation to Gold.A) The tariff uncertainty is likely to make companies pause on new capital expenditures and expansion plans until the new tariff rates are finalized over the next 90 days until June. As a result, it is likely that Corporate India would remain cautious leading to 3-5% earnings cut for FY26.A) Incrementally staggering purchases in domestic sectors such as Financial Services and consumer discretionary could be considered, depending on one's ability to put capital at risk.A) Investors are likely to remain fairly liquid and deploy on corrections. Investor bearishness is the highest since March 2009.A) While valuations are one standard deviation below 5-year averages, further fall is not ruled out until bilateral trade talk news between India and the U.S. trickle out over the next several weeks. Accordingly, markets would be volatile as they digest news flow.A) Investors should focus on companies which have strong earnings outlook, irrespective of whether they are large, mid or small cap companies.A) Interest rates need to fall further in India, which would aid as a growth catalyst. FII will return to India once they see evidence of earnings growth revival which is at least couple of quarters away.(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)


Time of India
28-04-2025
- Business
- Time of India
ETMarkets Smart Talk: Investor bearishness at highest levels since 2009, says Chakri Lokapriya
In this edition of ETMarkets Smart Talk, Chakri Lokapriya , CIO - Equities at LGT Wealth India, shares his insights on the current market turbulence triggered by the US tariffs on global imports. Lokapriya points out that fear, rather than valuations, is driving market sentiment, with investor bearishness at its highest levels since 2009. He discusses the potential impact on India's economy , sectors to watch amid global uncertainties, the outlook for corporate earnings , and how investors — both domestic and foreign — are positioning themselves in these volatile times. Edited Excerpts - Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Q) We started off April or the new financial year on a volatile note with tariff uncertainty. What is your take on markets for FY26? A) The markets resumed their fall on the 3rd of April due to the US imposing Tariffs on goods imported from 180 countries into America. The tariffs were imposed to lower trade imbalances and deficits in the U.S.A. Markets fear that Trump's tariffs could raise US inflation, pulling down economic growth worldwide. Fear is the driving force in the market rather than valuations. The 90 day pause on tariffs gives countries to reach bilateral agreements with the US and hence FY26 is likely to be very volatile. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Free P2,000 GCash eGift UnionBank Credit Card Apply Now Undo Q) What is your take on US Tariff introduced by the Donald Trump government. How will it impact economy and Indian markets? A) The Indian Govt is among 6 out of 180 countries that have offered concessions on US imports into India and would viewed positively by Trump. Q) The chatter of a global slowdown becomes louder with new tariff measures in place from the US. How would that impact India and global economic growth? A) Indian Govt sources indicate a 90-day pause. Until then, 10% tariffs apply. Live Events Piyush Goel, Minister of Commerce, leading a team working with the US Govt to arrive at a bilateral agreement. However, in the interim GDP growth is likely to slowdown by 30 to 50 bp. Q) Gold hit fresh record high while equity markets witnessed a knee jerk reaction post tariff announcement. Does it make sense to increase allocation towards Gold? A) With Gold at all time highs, it is recommended to have a neutral allocation to Gold. Q) Do you think earnings of India Inc. might take a hit with tariff measures which would in turn result in earnings downgrades? A) The tariff uncertainty is likely to make companies pause on new capital expenditures and expansion plans until the new tariff rates are finalized over the next 90 days until June. As a result, it is likely that Corporate India would remain cautious leading to 3-5% earnings cut for FY26. Q) Which sectors should one look for to deploy fresh money amid tariff and global economic slowdown? A) Incrementally staggering purchases in domestic sectors such as Financial Services and consumer discretionary could be considered, depending on one's ability to put capital at risk. Q) How are HNIs and big-ticket investors allocation money? Are they diversifying globally or buying treasures to protect the portfolio? A) Investors are likely to remain fairly liquid and deploy on corrections. Investor bearishness is the highest since March 2009. Q) After recent correction how is India placed among EM players in terms of valuations? A) While valuations are one standard deviation below 5-year averages, further fall is not ruled out until bilateral trade talk news between India and the U.S. trickle out over the next several weeks. Accordingly, markets would be volatile as they digest news flow. Q) How should one play small & midcaps in FY26? A) Investors should focus on companies which have strong earnings outlook, irrespective of whether they are large, mid or small cap companies. Q) What about FIIs? What is the trend you see for smart money moving back to India? A) Interest rates need to fall further in India, which would aid as a growth catalyst. FII will return to India once they see evidence of earnings growth revival which is at least couple of quarters away.