Mumbai June 14: J P Morgan Asset Management is likely to go overweight on India from the end of this year, a top company official said.
“We might go back to being overweight on India at the tail-end of this year, especially after the whole earnings per share (EPS) disappointment is behind us,” J P Morgan Asset Management Managing Director and Head Asia CPM Team, Adam Matthews, told reporters here today.
“Almost 65-68 per cent of the companies had missed expectations,” he added.
J P Morgan AMC has not downgraded India, but it was a tactical change to be neutral on India from the position of overweight, he said.
“Indian markets give good returns, but there are other markets that give you better returns. So it was more a tactical than a structured change,” Matthews said. The AMC expected India to generate more than 20 per cent EPS growth.
He said that inflation in India was a concern, adding that recent reports suggested that inflation had started to abate which was a good sign.
He said the mutual fund was focused on its infrastructure theme, and continued to invest in coal companies in Asia. He added it was positive on materials, consumer durables and was selective about banks and had reduced its exposure to the auto sector. The AMC that launched its ASEAN Equity off-shore fund, a fund of funds scheme on June 10 in India, said it would allocate 40.2 per cent of its resources in Singaporean companies, 20.6 per cent in Thailand companies and hold on 7.5 per cent as cash to meet liquidity requirements. Matthews said 36.5 per cent of the investment would be made in the financial sector and 16 per cent in the industrial sector.
A fund of fund scheme is where the amount collected in one fund is invested in units of other mutual fund scheme. When asked the amount that it was aiming to garner from the scheme which closes on June 24, J P Morgan Asset Management Vice President and Head Retail Sales, Arindam Ghosh, said it did not have a target.
The amount mopped up in the fund will be used as a feeder fund in their Luxembourg fund, Matthews said. PTI