Mihir Vora, TRUST MF CIO, Sees Indian Economic Growth Boost due to Tariffs: Here's the Scoop
"Mihir Vora of Trust Mutual Fund discusses sector-based investment decisions amid market uncertainties"
Yassaaw! Capital growth in India is set to land a turbocharger - you heard it right - thanks to the tariff situation, and here's the lowdown on why Mihir Vora, the big kahuna at TRUST Mutual Fund, believes that!
Ananya Grover Jump on our App Mihir sees India's growth taking off due to those tariffs, folks! In a chat with Ananya Grover, Mihir spills the tea that he's expecting a heap of extra dough to flow into India. Sound check:
D'ya see that correction in September highs comin'?
Well, the recent slump, while somewhat expected, took longer than anticipated. It sorta unfolded gradually, with large-caps tumbling first. Ya know, dec-Jan saw mid and small caps holding strong, but after that, they caved in too. But, the market started bouncing back! It's been one helluv a volatile period, mainly due to that ol' Trump[1][2].
Strategy amidst chaos?
We didn't mess about with portfolio changes too much, man. Our principle is, don't go all-in on cash calls. They only work out half the time, and when they ain't, you end up messin' with the long-term value[1][2]. We prefer sector and stock selection for value-addition. Plus, most of the dough that comes our way already has asset allocation done. So, we rather plow that money into stocks instead of holding a big ol' wad of cash. Normally, we aim to keep it between 2-3%, but in December, we pulled some profits from small and mid-caps and chucked 'em into financial names we reckoned were on the cheap[2].
What's cookin' in the industrial sector, since you're heavy into it?
Apart from the financials we like for their connection to both economic growth and demographics, we're also keen on physical asset creation[1]. Without any hoo-ha in infrastructure, manufacturing, and real estate, we ain't gonna smash a GDP growth target over 5.5%. If we aim for 6.5-7-7.5%, it gotta come from the ground-up, i.e., expanding our infrastructure[1]. We also hunt the sub-segments like chemicals, auto, and ancillaries, and defense[1].
Why'd the correction happen? Was it 'cause the foreign dollars fled to China and the US?
Oh, people have a thing for China, alright[1][2]. With the on-going trade quest, that fear is only gettin' worse. But, ol' China ain't been performing hot lately. In December, BYD claimed market share, and the DeepSeek movement rolled in[2]. So, some folks squared their positions. There's a herd instinct, but it's fizzled out, for the most part[2].
In the US, there was a flood of funds as the dollar appreciated. Last year, the Fed chopped rates, but the US long bond yields, man, they skyrocketed! That's never happened before. It happened 'cause a ton of bonds are due to mature in the next three years[2]. The US did a whole bunch of fiscal stimulus, which has upped the debt-to-GDP ratio after COVID[2]. Most of that stimulus came from issuing bonds, which are now gonna mature. This cranked up the dollar, and the US drew in a whole mess of attention[2]. But now, there's less faith in the US economy, and the buck is droppin' too[2]. So, mo' money is pouring back into emerging markets and other regions[2]. It was largely the US and the dollar game, but that's done, and it's working in our favor now[2].
Got any stock picks for May 2025?
FIIs have been glowin' from the inside for the last ten days, and Mihir reckons this bonfire will keep smolderin'[2]. After all, India's the fastest-growin' large economy in the world[2]. The rupee's steady, oil prices are fallin', and gold's increasin'.
TRUST's flexicap fund just hit a thousand-crore AUM. What's your secret sauce?
We run it sorta market-cap-agnostic, West Coast[1][2]. That means we don't do a top-down call on how much to invest in large, mid, or small caps. We perform bottom-up stock selection. The asset allocation in large and small is more of a byproduct of our stock picks and a bit of diversification and risk control[2]. We tapped into small caps big ol' style 'cause some performed really well for us, but we wanted to gradually pile into NBFCs and banks[2].
What's the deal with Donald Trump?
Some say Trump, Trump, Trump, but Mihir ain't got no beef with the dude or the tariffs[1][2]. He's just lauding the positive impact they could have on our beautiful economy and make India a more attractive destination for incremental funds. But remember, it's not just the foreign money we're banking on. Our focus remains squarely on our domestic scene, like banks, NBFCs, and cyclicals[1][2].
- Mihir Vora, the Chief Investment Officer of TRUST Mutual Fund, expects a significant influx of money into India due to the tariff situation, anticipating a boost in economic growth.
- In a volatile period, the market has been gradually bouncing back after a slump that took longer than expected, with large-caps tumbling first, followed by mid and small caps.
- Mihir's strategy in managing the portfolio involves selecting sectors and stocks for value-addition, rather than going all-in on cash calls.
- Apart from financial stocks, TRUST Mutual Fund is also keen on physical asset creation across infrastructure, manufacturing, real estate, chemicals, auto, ancillaries, and defense.
- The recent correction in the market was partially caused by foreign investors fleeing to China and the US due to ongoing trade tensions and a stronger US dollar, but the situation is now improving as more money is flowing back into emerging markets.
- In the long term, Mihir sees interest in the Indian market still growing due to its status as the fastest-growing large economy in the world, with a steadily appreciating rupee, falling oil prices, and increasing gold values.
- The TRUST flexicap fund recently hit a thousand-crore Assets Under Management (AUM), using a market-cap-agnostic approach that allows for bottom-up stock selection and a balance of large, mid, and small caps.
- Despite the potential positive impact of tariffs, Mihir remains focused on the domestic economy, investing in sectors like banks, NBFCs, and cyclicals.
- Saurabh probaby couldn't help but strengthen his portfolio by considering the tariff situation, general-news, technology, business, and finance, especially in relation to stocks, investments, the economy, and the market, with a particular interest in midcaps.
