Kotak Mutual Fund’s Nilesh Shah, speaking at the ET Alpha Wealth Summit 2.0, said that the best investment ideas can emerge during a bear market. He noted that the equity market has delivered neither strong nor negative returns over the past two years, but said he remains confident that India’s growth story is a compounding one.

Shah contrasted India with South Korea, where he expects growth to see greater ups and downs, citing three key factors — talent, capital and infrastructure.

“Many Indian startups are doing, albeit on a much smaller scale, what SpaceX is doing,” Shah said. He highlighted India’s progress in infrastructure, including roads, ports, airports, power and telecom, adding that the country has doubled or more than doubled its infrastructure over the past 20 years.

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Shah said that, “In the last six months, PMS has built about three times, and don't buy unnecessary gold, and we need to correct the perception of investors as it is important for our market”

In the current market scenario, one can consider these products in this market, which include SIFs, performing credit AIF, global funds, REITs and InvITs, Shah said.

While discussing specialised investment funds (SIFs), Shah said that this is a product which gives absolute or uncorrelated returns with the market and requires special skill and talent. So far, the experience has been good across the mutual fund industry and these are the uncorrelated return, absolute return products launched for the first time.

According to the Group President and Managing Director at Kotak Mahindra Asset Management, the second one is performing credit AIFs, which are close-ended products because there is illiquidity in the portfolio and there could be lower returns as well as hybrid kinds of AIFs.

Investors looking for international exposure, Shah said, should consider global funds will give geographical diversification, business diversification, and valuation diversification. Unfortunately, the $8 billion limit in mutual funds is fully utilized but there are opportunities available through the ODI route, OPI route, and LRS route.

Many mutual fund houses have launched GIFT City-based products and one can either go for big markets like the US and China on a single-country basis, or go for a theme like defense, technology, or biotech or go for global allocation, like emerging markets or developed markets as both active and passive options are available.

Commenting on the portfolio allocation, Shah recommends allocating between 15% to 20% of the portfolio towards global assets, including gold and silver, which are denominated in dollars.

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As in the last five years, the REIT and InvIT index return is in double digits so Shah said that there is an opportunity to sell your existing real estate and go into REIT and InvIT.

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