Latest news with #SandeepTandon
Economic Times
15 hours ago
- Business
- Economic Times
Retail investors now the smart money, HNIs more prone to panic: Sandeep Tandon
If I have to see, look at in last one year redemptions at our end, just do a redemption analysis, majority of the money if I have to say, if I say, maybe two-third of my redemption is coming from HNI and family office; only one-third comes and that also very interesting within one-third majority of redemption which coming from real retail investor is come from direct line not through regular route, they also need handholding. "I can say with good amount of confidence, at least till 2047 when demographic cycle peaks out in India, till then India PE multiple remains elevated for maybe you are talking about another 22 years or so, so it is more than 16 years I am saying that India multiple remain highest, which means earnings will expand but PE expansion is very important. So, as long PE remain elevated, the probability that you make good returns from the market," says Sandeep Tandon, CIO, Quant Mutual Fund. We were just reminiscing in the last 16 years the markets have seen so much. The world has seen so much, yet you have made just phenomenal returns. If you just did nothing, that is all you had to do. Sandeep Tandon: Correct. Are the next 16 going to be like that? Sandeep Tandon: It is very difficult to visualise exact 16 years. But if I have to look at India, there is a very interesting data, I will show you, like a lot of people forecast earnings, what will be the earnings for 5 years, 10 years perspective generally look at in numbers. We as Quant from a behaviour perspective we try to forecast the multiples. How we define multiple? Through perception, analytics. It is again interesting thesis which we have built, India perception has changed, something has dramatically changed in last few years. And if I have to say that India perception has changed and which means the PE multiple of Indian stock market will remain elevated from longer term perspective. I can say with good amount of confidence, at least till 2047 when demographic cycle peaks out in India, till then India PE multiple remains elevated for maybe you are talking about another 22 years or so, so it is more than 16 years I am saying that India multiple remain highest, which means earnings will expand but PE expansion is very important. So, as long PE remain elevated, the probability that you make good returns from the 16 years we have had magical moments -- jam trinity, financial inclusion, made in India, startup, Maha Kumbh. Which really could be the big factor at play, what could be that secret ingredient or secret sauce which in a sense will bind Indian market forward? Sandeep Tandon: I think what has changed in last maybe, if I have to say in this Modi's decade, it is about same thing, India perception. The young people, not only their risk appetite is clearly visible, they believe they can demonstrate few things. The neglected people, they are coming back and that is a big force to reckon. Like, people talk about China is about their government, they are doing it. Here the entrepreneurship and we are seeing for the first time this level of entrepreneurship even from the institute, people wants to start their own companies not join the companies, so that is something has changed. And financial inclusion has played a very important role in this whole journey. I will say even 2020 remember as a covid issue, but something got changed in 2020. A lot of people were sitting at home, first time they analysed their investment and actually the expenses was not there, I think that was a change moment where people started focusing on investment and the wealth got created. Now, that that M2M gains which retail investor sitting is very meaningful and that is actually driving. So, I always say every bull run is driven by some leadership, this time leadership is retail and retail base is very large. So, if you can say maybe a decadal opportunity from a returns perspective, maybe we have seen just five years or so for the current decade. Since you are so much into psychology of the markets and market participants, retail also comes with panic. Retail also comes with every news flash and reacting to every news flash. I am not talking about the mutual fund corpus money, but I am talking about more active participants. Sandeep Tandon: I always try to refer, this is some interesting work which we have done, when you talk about retail investor, it is actually jumbled up. Anything which is in non-institution is considered as retail actually. Actually, it is not. You have to differentiate that component from a HNI, family office, ultra-HNI and I always said that we can always see exactly at the bottom of the cycle, actually they are buyer, they are not getting panic. Who is getting panic? The people who are doing business. When I differentiate investor versus business, anybody who looks at their M2M on daily basis, for them this is the business and hence even market fall 10% if they believe that market can fall another 10%, they will exit, where retail investor is not. So, you have to differentiate the type of investor. Investor do not panic so easily. BUT somebody is doing business, which is the case for large family office, ultra-HNI, and HNIs, that segments panic. If I have to see, look at in last one year redemptions at our end, just do a redemption analysis, majority of the money if I have to say, if I say, maybe two-third of my redemption is coming from HNI and family office; only one-third comes and that also very interesting within one-third majority of redemption which coming from real retail investor is come from direct line not through regular route, they also need handholding. So, what is the mood in the market right now because the news flow, the noise around geopolitics, domino effect on crude, tariffs, it is so high. But if I just look at the index in the last 28 days, the index has done nothing. We have moved in just a 600-point band. Sandeep Tandon: So, one way of looking at the turmoil or geopolitical volatility. Other way of looking at, look at we have seen India-Pakistan tension, we have seen trade war, we have seen now Middle East issue further escalating. Market has actually given you some positive returns. And the confidence is coming back. If you really look at September, October, and particularly January, February first quarter where some amount of capitulative move we saw in the market, I think that is changing and confidence is coming back and then market realised that India is the most safest place. In fact, three months back we made this call not only from India, India is a risk-on rally and globally is a risk-off. But what is very important is the decoupling process for India has begun. We believe India has now decoupled from global market, that is a cycle which we have been talking about in 2025 it begins, and we have seen now the decoupling process has begun. You look at the impact what happened in the US market, we are hardly any impact out here. And the turmoil which we are seeing, the first country used to get affected purely from a crude perspective. And if you really look at this time also, crude has also spiked very recently, it has only because of very recent phenomena we have seen the impact. Otherwise, crude also has been pretty stable. So, we are jumping from long-term to short-term. We have got a short-term view. Let us talk about the long-term view. Long-term view is that the PE multiples will remain elevated. India becomes what could be called as a special situation stock. What could be the next aha thing for India? For example, coming back by the SIP investor has been the aha moment. Digitisation has been the aha moment. Make in India has been the aha moment. What is the next aha moment for India now? Sandeep Tandon: Very difficult to visualise in at this point in time, but only thing the way I look at from a regulations point of view, sebi has include the, we can talk about our industry, sif, the specialised investment fund, a new category. And obviously it is like we were the first to get that approval, but what is very important is that new segment is coming where it really help you from a diversification perspective. Like globally when you talk about hedge fund criteria, people trade or the prop desk or the high frequency algo, with route a short-term investment thesis will also gather momentum that is how you can make money in the short-term perspective also, how you better manage your returns also, how diversification through sif route also you can create better risk adjusted book. So, new instrument which is coming, which is not the case… Let us say some of these instrument was the part of only the HNI, family office, or the large ticket customer, I think now real, real retail customer will also be able to participate through SIF route and some more products will come. So, I am more excited that you will see innovation coming through product. Technology is obviously playing a very important role. Cost is coming down drastically. And what is very important when I talk about perception has changed, India, like people, retail investors are more convinced this time and I am saying they have become much more mature than as compared to what I have seen in 10, 20, 30 years. This time something is very different. Retail has not panic. If you really look at, they are not getting capitulated so easily. It is the more sophisticated investor they are panicking much earlier because they are more smart and they are more educated and leveraged. So, it is a phenomena something which we have to really respect the real retail investor is coming and they have patience now. So, what falls into your buy and hold category for next five years, 16 years is a long time, for next five years? Sandeep Tandon: Yes, I agree. So, five years let us say given the geopolitical turmoil, we also believe that beginning of the year say next five years also going to be challenging from a global perspective. Hence, I like to be more focused on the domestic economy. So, power is the theme. Power remains buy on dips. It is a decadal opportunity. So, if next five year, I think by 2032, power stocks should do well. All energy basket should do very well. Then, I will more bullish on the India infrastructure space, not just EPC companies, large infra plays whether ports, airports, even you can say EPC company, also large infra names which should be a biggest beneficiary because we have seen irrespective of state government also the infra spending has not cut down. I think we are in a massive investment phase in India, so that is a space which we like. And obviously if infra does well, then logically materials should also follow. So, I am saying first infra. And consumption as a theme is also coming back. The tax benefit which government has given, the RBI recent cuts will also boost the consumption. So, a lot of consumption stock which have been neglected territory or they were erstwhile admiring territory stock, those are the names one should look at. Hospitality space we still like, whether you talk about hotels, hospitals. So, those are the area. Services industry also. We want to see something new now. Like all those names which has been in admired territory for last few years may or may not give you that sort of returns going forward, so I will look for under ownership, I look for attractive valuation and research or I say uncovered.
Time of India
16 hours ago
- Business
- Time of India
Retail investors now the smart money, HNIs more prone to panic: Sandeep Tandon
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel "I can say with good amount of confidence, at least till 2047 when demographic cycle peaks out in India, till then India PE multiple remains elevated for maybe you are talking about another 22 years or so, so it is more than 16 years I am saying that India multiple remain highest, which means earnings will expand but PE expansion is very important. So, as long PE remain elevated, the probability that you make good returns from the market," says Sandeep Tandon , CIO, Quant Mutual Fund is very difficult to visualise exact 16 years. But if I have to look at India, there is a very interesting data, I will show you, like a lot of people forecast earnings, what will be the earnings for 5 years, 10 years perspective generally look at in numbers. We as Quant from a behaviour perspective we try to forecast the multiples. How we define multiple? Through perception, analytics. It is again interesting thesis which we have built, India perception has changed, something has dramatically changed in last few years. And if I have to say that India perception has changed and which means the PE multiple of Indian stock market will remain elevated from longer term perspective. I can say with good amount of confidence, at least till 2047 when demographic cycle peaks out in India, till then India PE multiple remains elevated for maybe you are talking about another 22 years or so, so it is more than 16 years I am saying that India multiple remain highest, which means earnings will expand but PE expansion is very important. So, as long PE remain elevated, the probability that you make good returns from the market.I think what has changed in last maybe, if I have to say in this Modi's decade, it is about same thing, India perception. The young people, not only their risk appetite is clearly visible, they believe they can demonstrate few things. The neglected people, they are coming back and that is a big force to people talk about China is about their government, they are doing it. Here the entrepreneurship and we are seeing for the first time this level of entrepreneurship even from the institute, people wants to start their own companies not join the companies, so that is something has financial inclusion has played a very important role in this whole journey. I will say even 2020 remember as a covid issue, but something got changed in 2020. A lot of people were sitting at home, first time they analysed their investment and actually the expenses was not there, I think that was a change moment where people started focusing on investment and the wealth got that that M2M gains which retail investor sitting is very meaningful and that is actually driving. So, I always say every bull run is driven by some leadership, this time leadership is retail and retail base is very large. So, if you can say maybe a decadal opportunity from a returns perspective, maybe we have seen just five years or so for the current Tandon: I always try to refer, this is some interesting work which we have done, when you talk about retail investor, it is actually jumbled up. Anything which is in non-institution is considered as retail actually. Actually, it is not. You have to differentiate that component from a HNI, family office, ultra-HNI and I always said that we can always see exactly at the bottom of the cycle, actually they are buyer, they are not getting panic. Who is getting panic? The people who are doing business. When I differentiate investor versus business, anybody who looks at their M2M on daily basis, for them this is the business and hence even market fall 10% if they believe that market can fall another 10%, they will exit, where retail investor is you have to differentiate the type of investor. Investor do not panic so easily. BUT somebody is doing business, which is the case for large family office, ultra-HNI, and HNIs, that segments panic. If I have to see, look at in last one year redemptions at our end, just do a redemption analysis, majority of the money if I have to say, if I say, maybe two-third of my redemption is coming from HNI and family office; only one-third comes and that also very interesting within one-third majority of redemption which coming from real retail investor is come from direct line not through regular route, they also need one way of looking at the turmoil or geopolitical volatility. Other way of looking at, look at we have seen India-Pakistan tension, we have seen trade war, we have seen now Middle East issue further escalating. Market has actually given you some positive returns. And the confidence is coming back. If you really look at September, October, and particularly January, February first quarter where some amount of capitulative move we saw in the market, I think that is changing and confidence is coming back and then market realised that India is the most safest place. In fact, three months back we made this call not only from India, India is a risk-on rally and globally is a what is very important is the decoupling process for India has begun. We believe India has now decoupled from global market, that is a cycle which we have been talking about in 2025 it begins, and we have seen now the decoupling process has look at the impact what happened in the US market, we are hardly any impact out here. And the turmoil which we are seeing, the first country used to get affected purely from a crude perspective. And if you really look at this time also, crude has also spiked very recently, it has only because of very recent phenomena we have seen the impact. Otherwise, crude also has been pretty difficult to visualise in at this point in time, but only thing the way I look at from a regulations point of view, sebi has include the, we can talk about our industry, sif, the specialised investment fund, a new category. And obviously it is like we were the first to get that approval, but what is very important is that new segment is coming where it really help you from a diversification globally when you talk about hedge fund criteria, people trade or the prop desk or the high frequency algo, with route a short-term investment thesis will also gather momentum that is how you can make money in the short-term perspective also, how you better manage your returns also, how diversification through sif route also you can create better risk adjusted new instrument which is coming, which is not the case… Let us say some of these instrument was the part of only the HNI, family office, or the large ticket customer, I think now real, real retail customer will also be able to participate through SIF route and some more products will I am more excited that you will see innovation coming through product. Technology is obviously playing a very important role. Cost is coming down what is very important when I talk about perception has changed, India, like people, retail investors are more convinced this time and I am saying they have become much more mature than as compared to what I have seen in 10, 20, 30 time something is very different. Retail has not panic. If you really look at, they are not getting capitulated so easily. It is the more sophisticated investor they are panicking much earlier because they are more smart and they are more educated and leveraged. So, it is a phenomena something which we have to really respect the real retail investor is coming and they have patience I agree. So, five years let us say given the geopolitical turmoil, we also believe that beginning of the year say next five years also going to be challenging from a global perspective. Hence, I like to be more focused on the domestic economy. So, power is the theme. Power remains buy on dips. It is a decadal opportunity. So, if next five year, I think by 2032, power stocks should do well. All energy basket should do very I will more bullish on the India infrastructure space, not just EPC companies, large infra plays whether ports, airports, even you can say EPC company, also large infra names which should be a biggest beneficiary because we have seen irrespective of state government also the infra spending has not cut down.I think we are in a massive investment phase in India, so that is a space which we like. And obviously if infra does well, then logically materials should also follow. So, I am saying first infra. And consumption as a theme is also coming back. The tax benefit which government has given, the RBI recent cuts will also boost the a lot of consumption stock which have been neglected territory or they were erstwhile admiring territory stock, those are the names one should look at. Hospitality space we still like, whether you talk about hotels, hospitals. So, those are the area. Services industry want to see something new now. Like all those names which has been in admired territory for last few years may or may not give you that sort of returns going forward, so I will look for under ownership, I look for attractive valuation and research or I say uncovered.
Mint
4 days ago
- Business
- Mint
Quant Small Cap Fund: 5 key things you should know before investing
As small cap mutual funds continue to attract interest amid rapidly evolving global outlook and a growing risk appetite among retail investors in the country, the Quant Small Cap Fund clearly stands out for its aggressive investment strategy and lucrative long term returns. Quant's philosophy revolves around capitalising on market cycles through a well-defined predictive and behavioural framework. In the words of its founder, Sandeep Tandon, 'I have always believed that the flip side of any crisis is opportunity, as bubbles and busts are natural occurrences. To grow wealth, it is imperative to participate in the periodic bubbles but only equipped with a predictive framework and behavioral strength that allows the right exit.' This ideology is reflected in the fund's approach, which combines aggressive positioning with disciplined risk management to tap into evolving opportunities. Still, is this the right fund for you? To take a call on this you need first take a look at five crucial factors associated with the fund. The Quant Small Cap Fund is an open ended equity mutual fund scheme, it primarily invests in small cap businesses. According to the fund house the scheme focuses on delivering long term capital growth and wealth appreciation by investing a minimum of 65% in small cap businesses. The fund is classified as 'Very High Risk' under SEBI's riskometer. According to the official website the Net Asset Value (NAV) of the Direct Plan Growth option stood at ₹ 253.36 as of June 15, 2025. Aspirational investors can start investing with a minimum lump sum of ₹ 5,000 or through SIP starting from ₹ 1,000. This scheme has an exit load of 1% if redeemed within the first year. Furthermore, there is no loan if it is held beyond that. The asset allocation strategy permits investing between 65-100% in small cap businesses whereas the rest can even be invested in mid/ large cap stocks, debt, money market instruments and REITs/InvITs. The fund is taken care of by a well qualified team of Sandeep Tandon, Ankit Pande, Ayush Kumbhat, Yug Tibrewal, Sameer Kate and Sanjeev Sharma. It is benchmarked in line with the NIFTY Smallcap 250 Total Return Index (TRI), providing investors a relevant performance comparison within the small cap segment. Period Fund return (Direct plan, CAGR) NIFTY Smallcap 250 TRI Last 1 year 0.74% 6.02% Last 3 years 21.86% 17.81% Last 5 years 51.83% 37.42% Since inception (29th October 1996) 17.63% 16.03% Note: The returns discussed above are illustrative in nature. For the accurate and updated fund return details refer to the official website of the fund house. Hence, the Quant Small Cap Fund has consistently outperformed its benchmark over the medium to long term specially over a period of five years. The long term CAGR suggests resilience and efficient fund management. Therefore, aspirational investors seeking aggressive growth and wealth creation and are willing to weather market ups and downs may find this particular mutual fund investment scheme suitable provided they have a minimum of 5 to 7 years of investment vision. Disclaimer: This article is for informational purposes only and not investment advice. Mutual fund investments are subject to market risks. Please consult a financial advisor before investing.
Time of India
12-05-2025
- Business
- Time of India
What does Sandeep Tandon predict for India's bull market amid global economic changes?
Quant Mutual Fund 's CIO, Sandeep Tandon , believes the Indian market remains in a bull run, albeit a challenging phase. While the US is in a risk-off phase, India shows early signs of risk-on reversal, driven by relative safety in currency, macroeconomics, and corporate strength. India's leadership in peaking and bottoming out positions it as a leader in the current rally. The focus is on domestic stories and generic pharma. Unexpected things are happening everywhere. Tariffs are getting solved. The geopolitical tensions make it look like we are at the end of this cycle; earnings season is ending. FII selling is ending. Lots of cycles are ending. I hope the bull market cycle is not ending. Sandeep Tandon : No, we are still in a bull run. However, the easy phase of bull run is over. We are in a decisive phase of the bull run. We are in a decisive bull run, but within that, we are in a difficult phase of the bull run. Now, let us look at India. India right now is in a risk-on phase. where the US is in a risk-off phase. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Moose Approaches Girl At Bus Stop In Northern Samar - Watch What Happens Happy in Shape Undo Right from January, the US came into a risk-off phase. We are in a very unique situation where money will flow to India. In the last 15 trading or 20 trading sessions, the FII flow has been constructive. The moment the US investors become slightly jittery about the US, money will move out and this was our thesis in 2025, that the decoupling process will start, maybe by July. I was linking with the dollar cycle peaking out and the decoupling starting, but that process has already begun. What it means is that people are looking for safety. Even European investors are pulling out from the US. In the US, we have seen extraordinary cross border flows in the last many years. I think that cycle has peaked out. If 10% money shifts from the US to Asia-centred emerging markets, there will be a tsunami out here . The last fact sheet we wrote is not that bad for emerging markets. It is good for India. In fact, look at the beginning of the year, best of the strategists were bullish on the US. They wrote off emerging markets completely. Now the reverse has started. The US has peaked out. We said in January that the US will correct 15% to 20%, particularly since Nasdaq has already corrected. Maybe we can see a small pullback rally, but the ugly face of the next level of fall is still pending in the US. Live Events You Might Also Like: Will the escalating India-Pakistan conflict continue to rattle stock market? Why do you call India a risk on? Is it purely because of the valuations or are there other macro parameters which make you feel so? Sandeep Tandon: Yes, it is a macro parameter. Last year, in July 2024, we were very early to say it is a risk-off phase for India because macro, based on a lot of high frequency data, has started deteriorating. We were very early to say that the India risk-off phase begins, though the market rally is till September. So, it is irrespective of the market. But from a macro perspective, it is deteriorating. Now, we are saying that there are early signs of reversal. We are not saying that we are in massive risk-on. After what happened in September 2023, we saw a big pullback rally playing out. So, that is not the case. Markets are not always absolute. It is always about relativity. Money always shifts on a relative basis. If you find it difficult to make money in the US, people will move out and this is the phenomenon. So, it is not like the same FIIs who were sellers for the last two years or many quarters, the same institutions are buying again. So, something has changed. Is India becoming very cheap? The answer is no. India is not that cheap. There has been marginal correction. But what has changed? The perception about the US has changed. And hence, they have to shift. They will shift where they see better safety. It is not about absolute return, it is about safety first. So, in this environment, safety is very much in India. Both from a currency perspective, macro perspective, and given the size of the Indian institutions or the corporates which we have and the entrepreneurship drive we have. So, we are in a very commanding situation. India was leading in every aspect. We peaked out first. We bottomed out first. And hence, in this rally, we will be the leader and that is the case right now. Why have markets retraced their post tariff selloff? Today major US markets like S&P, Nasdaq and Dow have pretty much retraced whatever they lost in April. If the problem is in the US, then why have US markets come back so smartly? Sandeep Tandon: Maybe the best gauge will be the VIX indicator. The volatility index spiked vertically and whenever VIX spikes sharply, it tends to cool off before you see the next level of up move again in the VIX and that is the reason for any extraordinary shorting or anything which is linked with the news flow. On April 7, the Trump tariff drama started, most of the noise or narrative and a small deviation from that are taken positively by people. But if you ask me, is everything sorted out? Is everything settled and the world is back to normal? The answer is no. So, you have seen extreme reactions on one side, then we are seeing a reverse of that. The market may correct again. You Might Also Like: Market cautious, not panicking; see opportunities in 4 sectors: Prashant Khemka I am looking at your holdings right now and one of the top holdings in your smallcap scheme is Reliance. In your largecaps, it is Reliance. In midcap it is Reliance. The number two holding in all your schemes is Jio be it smallcap midcap or largecap. Sandeep Tandon: It is very simple. When you get into a risk-off phase, when I say we were early and we underperformed also, it is not like we did not; we underperformed, it is a part of a larger strategy. You move from illiquid to liquid, you move from small and mid to large, and you move from high beta to low beta. Now, in a midcap or a smallcap, you have a compulsion to maintain a certain weight. Let us say we maintain 65% smallcap. Now, I am not negative on smallcaps from a longer-term perspective, but from a near-term perspective or near or medium-term perspective, we felt that they have potential to underperform and hence it makes sense to move to largecap and liquid names like some you highlighted… Smallcaps are still expensive? The risk-off liquidity is still there. Would you like to have exposure to largecaps? Sandeep Tandon: It is a balancing act where I am trying to balance my beta of the portfolio. I am trying to balance liquidity. I am also balancing my redemption. So far, nothing has come. But in every aspect, it has to be well. I always believe in our portfolio, I think liquidity is very important because we always say liquidity is the prana. If you do not have that liquidity in place, it becomes very difficult sometimes. It is a psychological discomfort, for whatever reason if you are unable to sell anything. We as a house give a lot of importance on liquidity analytics. When it comes to our own portfolio, we look into that aspect also. What is the one space that you are completely avoiding? Is this the market to go in for bottom-up neglected stories like paints because now you have got that crude reversal? Sandeep Tandon: Without getting into specific stock, we as a house always look for buying opportunities in any stock which gets into a hated or neglected zone. I am not ruling out Asian Paints also. But the entire thesis right now is which is the sector where we are slightly more negative. In fact, since we turned negative on the US market, particularly Nasdaq, we are grossly underweight technology. We have hardly any exposure in technology. So, it was an outright call on the US market. Like in September we turned bullish on China. So, what will you do? You go overweight on metals because there is no way directly I can play these markets. So, indirectly we try to protect our impact for whatever reason it happens. You Might Also Like: Should the market focus on tariff war and not India-Pakistan conflict? Samir Arora explains Currently our entire focus is on domestic stories right from January. It is domestic and within export-focused, we have only generic pharma stocks because we believe irrespective of noise and price movement, there is no choice for you, or even the US customers. We have 55-60% of the generic market share. Is there any substitute like Bangladesh or Vietnam or any other country? The answer is no. So, not much can happen there despite the fact that the discomfort is huge right now. But the one area where we are comfortable with good earnings. If you look at the earning cycle, we are very optimistic about pharma as a space, generic as a space and Indian companies are in the leadership position. So, anything which is in a leadership position, which is growing, we are overweight in that. You do not think there is a risk from tariffs because there has been so much back and forth on pharma? Sandeep Tandon: No, because there is no substitute. Let's say for a vehicle, you can defer your car purchase days for two years. You can defer buying your garments for six months, but you cannot defer your medicine even for two days. So that is a compulsion you have. So, when you have a compulsion, you do not have too many choices. So, it is all about getting into that part rather than saying Trump has a choice. Our generics are 78% to 98% cheaper as compared to other things, and that is why they are called generic. If they are so attractively low in the prices, how does it matter even if they put a 10-20% tariff? Our companies are in a position to pass that on immediately and that impact even for US customers will be very tiny and even distributors can absorb it. So, it is a larger thesis call without getting into Trump's narrative. Trump is a very smart businessman, he is doing everything right for his country from a longer-term perspective and people react as if he is stupid. No. He is very well calculated. Sometimes he acts stupid, but it is only acting. Look at how smartly he has implemented a 10% tariff and nobody has made noise. Everything is 10%. Auto is 25%, metal is 25%. So, anyway% global market has accepted 10%. We are actually funding them. There was a time when you were bullish on metals and precious metals as well. What is your take now on the metals? Sandeep Tandon: On precious metal, we are quite bearish right now. When I say bearish, it is only from a near-term perspective. We think that gold has peaked out near 3450, 3500, both from a near-term and medium-term perspective. But we are structurally bullish from a longer-term perspective. Somebody says that from a 5-year, 10-years perspective, one should have a very sizable bullion exposure in their portfolio. So, we are very constructive. The challenge is that immediately we cannot hedge much because none of the custodians are ready for hedging. So we have moved out of gold and shifted to silver. We have to maintain 10% exposure in multi-assets. So, we are running with minimum 10% right now and instead of gold, we are running with silver. We think silver has better potential and that is the way we are managing it in a very dynamic manner. You got approval for a new scheme in which you can go short on? Sandeep Tandon: Yes, it is not a scheme. It is a separate license known as the SIF, specialized investment funds. What is that? Sandeep Tandon: SEBI has recently come out of the circular on SIF. Basically, as a mutual fund, we get a new category where I can have long-short strategies. In mutual funds, we can only hedge and we can only do true hedging. The same stock I have to short or maybe hedge through options route or futures root but only in the indices. In this case, Sebi has allowed us to have a short position of 25%. The starting point is 25%. You can go short. Sandeep Tandon: Yes. Where will you go short? Sandeep Tandon: We are running a long-short strategy. Let us say we are running a long-short strategy on equity products and for whatever reason, let us say we do not like , let us say Infosys we are long and short TCS we can do that, which is not the case in current mutual funds. So, from a risk perspective, it is a great product. Though generally perceived as a high risk thing, it is a specialised product, meant for institutional investors who are more financially literate about this product. It reduces the risk because in the bull market, this strategy will underperform, but in a normal environment, it is a great risk mitigation tool. If you raise money tomorrow, how will you construct that fund and where will you go long and where short? Sandeep Tandon: Let the final approval come for the specific schemes. In Friday's context, I would like to maintain long exposure toward the domestic side and some of the sectors like auto to run some short position in auto as a sector. You can also run some short positions in IT though it is too late right now, it has already corrected a lot, but for example's sake, if in January we had an aggressive view towards IT, maybe we could have run 25% short position IT. It is not only a great hedging strategy, it also reduces risk volatility in my portfolio. So, it is a great product from a longer-term perspective. Where is it right now at these levels given that a large part of the correction is already behind us? Where do you have that kind of conviction to go acutely short? Sandeep Tandon: Since we are already in a mild risk-on or risk-on phase in India, I am not looking for shorting anything right now, even IT. I am not going to advise anybody to go short, rather we will look for a buying opportunity at an appropriate time. Has the appropriate time come? The answer is no, but it will emerge soon. We are waiting for the opportunity that as and when inflection points happen, we should be buyers in these names. So, like Reliance where else do you have that kind of conviction that you can buy all out right now. Sandeep Tandon: Infra, the large infra space irrespective of any government in India, irrespective of any global environment. We are investing as a country in the infrastructure space and that is a need of the hour and we do not have too many companies, like L&T. There is a scarcity. In the last many years, only limited options are left. So, anything related to port, airport, infra names, EPC companies are areas we are quite bullish on. We have a very skewed structure including power. So, if somebody says where is the long-term perspective in the next seven-eight years – a decadal opportunity, I would say power, be it thermal, or green or any other alternatives. So, you are still bullish on the Adani Group ? Sandeep Tandon: I am quite bullish on Adani Group because they are in that India centric space and irrespective of perception. We do a lot of perception analytics and we were early in spotting that group. We believe from a cash flow perspective, they are generating capex in the right direction. They will be a sizable and affordable player in this country for someone with a vision for the next five years.
Economic Times
12-05-2025
- Business
- Economic Times
What does Sandeep Tandon predict for India's bull market amid global economic changes?
Quant Mutual Fund's CIO, Sandeep Tandon, believes the Indian market remains in a bull run, albeit a challenging phase. While the US is in a risk-off phase, India shows early signs of risk-on reversal, driven by relative safety in currency, macroeconomics, and corporate strength. India's leadership in peaking and bottoming out positions it as a leader in the current rally. The focus is on domestic stories and generic pharma. Unexpected things are happening everywhere. Tariffs are getting solved. The geopolitical tensions make it look like we are at the end of this cycle; earnings season is ending. FII selling is ending. Lots of cycles are ending. I hope the bull market cycle is not ending. Sandeep Tandon: No, we are still in a bull run. However, the easy phase of bull run is over. We are in a decisive phase of the bull run. We are in a decisive bull run, but within that, we are in a difficult phase of the bull run. Now, let us look at India. India right now is in a risk-on phase. where the US is in a risk-off phase. Right from January, the US came into a risk-off phase. We are in a very unique situation where money will flow to India. In the last 15 trading or 20 trading sessions, the FII flow has been constructive. The moment the US investors become slightly jittery about the US, money will move out and this was our thesis in 2025, that the decoupling process will start, maybe by July. I was linking with the dollar cycle peaking out and the decoupling starting, but that process has already begun. What it means is that people are looking for safety. Even European investors are pulling out from the US. In the US, we have seen extraordinary cross border flows in the last many years. I think that cycle has peaked out. If 10% money shifts from the US to Asia-centred emerging markets, there will be a tsunami out here . The last fact sheet we wrote is not that bad for emerging markets. It is good for India. In fact, look at the beginning of the year, best of the strategists were bullish on the US. They wrote off emerging markets completely. Now the reverse has started. The US has peaked out. We said in January that the US will correct 15% to 20%, particularly since Nasdaq has already corrected. Maybe we can see a small pullback rally, but the ugly face of the next level of fall is still pending in the US. Why do you call India a risk on? Is it purely because of the valuations or are there other macro parameters which make you feel so? Sandeep Tandon: Yes, it is a macro parameter. Last year, in July 2024, we were very early to say it is a risk-off phase for India because macro, based on a lot of high frequency data, has started deteriorating. We were very early to say that the India risk-off phase begins, though the market rally is till September. So, it is irrespective of the market. But from a macro perspective, it is deteriorating. Now, we are saying that there are early signs of reversal. We are not saying that we are in massive risk-on. After what happened in September 2023, we saw a big pullback rally playing out. So, that is not the case. Markets are not always absolute. It is always about relativity. Money always shifts on a relative basis. If you find it difficult to make money in the US, people will move out and this is the phenomenon. So, it is not like the same FIIs who were sellers for the last two years or many quarters, the same institutions are buying again. So, something has changed. Is India becoming very cheap? The answer is no. India is not that cheap. There has been marginal correction. But what has changed? The perception about the US has changed. And hence, they have to will shift where they see better safety. It is not about absolute return, it is about safety first. So, in this environment, safety is very much in India. Both from a currency perspective, macro perspective, and given the size of the Indian institutions or the corporates which we have and the entrepreneurship drive we have. So, we are in a very commanding situation. India was leading in every aspect. We peaked out first. We bottomed out first. And hence, in this rally, we will be the leader and that is the case right now. Why have markets retraced their post tariff selloff? Today major US markets like S&P, Nasdaq and Dow have pretty much retraced whatever they lost in April. If the problem is in the US, then why have US markets come back so smartly? Sandeep Tandon: Maybe the best gauge will be the VIX indicator. The volatility index spiked vertically and whenever VIX spikes sharply, it tends to cool off before you see the next level of up move again in the VIX and that is the reason for any extraordinary shorting or anything which is linked with the news flow. On April 7, the Trump tariff drama started, most of the noise or narrative and a small deviation from that are taken positively by people. But if you ask me, is everything sorted out? Is everything settled and the world is back to normal? The answer is no. So, you have seen extreme reactions on one side, then we are seeing a reverse of that. The market may correct again. I am looking at your holdings right now and one of the top holdings in your smallcap scheme is Reliance. In your largecaps, it is Reliance. In midcap it is Reliance. The number two holding in all your schemes is Jio be it smallcap midcap or largecap. Sandeep Tandon: It is very simple. When you get into a risk-off phase, when I say we were early and we underperformed also, it is not like we did not; we underperformed, it is a part of a larger strategy. You move from illiquid to liquid, you move from small and mid to large, and you move from high beta to low beta. Now, in a midcap or a smallcap, you have a compulsion to maintain a certain weight. Let us say we maintain 65% smallcap. Now, I am not negative on smallcaps from a longer-term perspective, but from a near-term perspective or near or medium-term perspective, we felt that they have potential to underperform and hence it makes sense to move to largecap and liquid names like some you highlighted… Smallcaps are still expensive? The risk-off liquidity is still there. Would you like to have exposure to largecaps? Sandeep Tandon: It is a balancing act where I am trying to balance my beta of the portfolio. I am trying to balance liquidity. I am also balancing my redemption. So far, nothing has come. But in every aspect, it has to be well. I always believe in our portfolio, I think liquidity is very important because we always say liquidity is the prana. If you do not have that liquidity in place, it becomes very difficult sometimes. It is a psychological discomfort, for whatever reason if you are unable to sell anything. We as a house give a lot of importance on liquidity analytics. When it comes to our own portfolio, we look into that aspect also. What is the one space that you are completely avoiding? Is this the market to go in for bottom-up neglected stories like paints because now you have got that crude reversal? Sandeep Tandon: Without getting into specific stock, we as a house always look for buying opportunities in any stock which gets into a hated or neglected zone. I am not ruling out Asian Paints also. But the entire thesis right now is which is the sector where we are slightly more negative. In fact, since we turned negative on the US market, particularly Nasdaq, we are grossly underweight technology. We have hardly any exposure in technology. So, it was an outright call on the US market. Like in September we turned bullish on China. So, what will you do? You go overweight on metals because there is no way directly I can play these markets. So, indirectly we try to protect our impact for whatever reason it happens. Currently our entire focus is on domestic stories right from January. It is domestic and within export-focused, we have only generic pharma stocks because we believe irrespective of noise and price movement, there is no choice for you, or even the US customers. We have 55-60% of the generic market share. Is there any substitute like Bangladesh or Vietnam or any other country? The answer is no. So, not much can happen there despite the fact that the discomfort is huge right now. But the one area where we are comfortable with good earnings. If you look at the earning cycle, we are very optimistic about pharma as a space, generic as a space and Indian companies are in the leadership position. So, anything which is in a leadership position, which is growing, we are overweight in that. You do not think there is a risk from tariffs because there has been so much back and forth on pharma? Sandeep Tandon: No, because there is no substitute. Let's say for a vehicle, you can defer your car purchase days for two years. You can defer buying your garments for six months, but you cannot defer your medicine even for two days. So that is a compulsion you have. So, when you have a compulsion, you do not have too many choices. So, it is all about getting into that part rather than saying Trump has a choice. Our generics are 78% to 98% cheaper as compared to other things, and that is why they are called generic. If they are so attractively low in the prices, how does it matter even if they put a 10-20% tariff? Our companies are in a position to pass that on immediately and that impact even for US customers will be very tiny and even distributors can absorb it. So, it is a larger thesis call without getting into Trump's narrative. Trump is a very smart businessman, he is doing everything right for his country from a longer-term perspective and people react as if he is stupid. No. He is very well calculated. Sometimes he acts stupid, but it is only acting. Look at how smartly he has implemented a 10% tariff and nobody has made noise. Everything is 10%. Auto is 25%, metal is 25%. So, anyway% global market has accepted 10%. We are actually funding them. There was a time when you were bullish on metals and precious metals as well. What is your take now on the metals? Sandeep Tandon: On precious metal, we are quite bearish right now. When I say bearish, it is only from a near-term perspective. We think that gold has peaked out near 3450, 3500, both from a near-term and medium-term perspective. But we are structurally bullish from a longer-term perspective. Somebody says that from a 5-year, 10-years perspective, one should have a very sizable bullion exposure in their portfolio. So, we are very constructive. The challenge is that immediately we cannot hedge much because none of the custodians are ready for hedging. So we have moved out of gold and shifted to silver. We have to maintain 10% exposure in multi-assets. So, we are running with minimum 10% right now and instead of gold, we are running with silver. We think silver has better potential and that is the way we are managing it in a very dynamic manner. You got approval for a new scheme in which you can go short on? Sandeep Tandon: Yes, it is not a scheme. It is a separate license known as the SIF, specialized investment funds. What is that? Sandeep Tandon: SEBI has recently come out of the circular on SIF. Basically, as a mutual fund, we get a new category where I can have long-short strategies. In mutual funds, we can only hedge and we can only do true hedging. The same stock I have to short or maybe hedge through options route or futures root but only in the indices. In this case, Sebi has allowed us to have a short position of 25%. The starting point is 25%. You can go short. Sandeep Tandon: Yes. Where will you go short? Sandeep Tandon: We are running a long-short strategy. Let us say we are running a long-short strategy on equity products and for whatever reason, let us say we do not like , let us say Infosys we are long and short TCS we can do that, which is not the case in current mutual funds. So, from a risk perspective, it is a great product. Though generally perceived as a high risk thing, it is a specialised product, meant for institutional investors who are more financially literate about this product. It reduces the risk because in the bull market, this strategy will underperform, but in a normal environment, it is a great risk mitigation tool. If you raise money tomorrow, how will you construct that fund and where will you go long and where short? Sandeep Tandon: Let the final approval come for the specific schemes. In Friday's context, I would like to maintain long exposure toward the domestic side and some of the sectors like auto to run some short position in auto as a sector. You can also run some short positions in IT though it is too late right now, it has already corrected a lot, but for example's sake, if in January we had an aggressive view towards IT, maybe we could have run 25% short position IT. It is not only a great hedging strategy, it also reduces risk volatility in my portfolio. So, it is a great product from a longer-term perspective. Where is it right now at these levels given that a large part of the correction is already behind us? Where do you have that kind of conviction to go acutely short? Sandeep Tandon: Since we are already in a mild risk-on or risk-on phase in India, I am not looking for shorting anything right now, even IT. I am not going to advise anybody to go short, rather we will look for a buying opportunity at an appropriate time. Has the appropriate time come? The answer is no, but it will emerge soon. We are waiting for the opportunity that as and when inflection points happen, we should be buyers in these names. So, like Reliance where else do you have that kind of conviction that you can buy all out right now. Sandeep Tandon: Infra, the large infra space irrespective of any government in India, irrespective of any global environment. We are investing as a country in the infrastructure space and that is a need of the hour and we do not have too many companies, like L&T. There is a scarcity. In the last many years, only limited options are left. So, anything related to port, airport, infra names, EPC companies are areas we are quite bullish on. We have a very skewed structure including power. So, if somebody says where is the long-term perspective in the next seven-eight years – a decadal opportunity, I would say power, be it thermal, or green or any other alternatives. So, you are still bullish on the Adani Group? Sandeep Tandon: I am quite bullish on Adani Group because they are in that India centric space and irrespective of perception. We do a lot of perception analytics and we were early in spotting that group. We believe from a cash flow perspective, they are generating capex in the right direction. They will be a sizable and affordable player in this country for someone with a vision for the next five years.
