Portfolio is now 2% above last peak, Sensex approx. 2% below and BSE Midcap approx. 2.5% below their respective last peaks
Well looks like BSE Midcap did play a good catch up since my last update…
As always, my focus has been on Portfolio structure & allocation, so I had been thinking, am I well placed for any upcoming bull run and subsequent melt up, if any? I am well aware that leaders change in every bull run etc. etc. and looks like next few years could well belong to manufacturing, defence, engineering, even auto/auto anc., green energy etc. etc…in this context, I was introspecting how am I placed and am I ok with it…
My current portfolio structure stands like this –
1. FMCG – 46%: Mostly midcap ones with mostly older holdings and added in recent crashes as well.
2. Adhesives, Chemicals, Paints – 11.5%: Hold only 2 stocks. Pidilite is older holdings and Asian Paints added in recent crashes
3. BFSI – 11%: 8% in Life Insurance and rest in 1 AMC and 1 Bank. Life Insurance is older holding.
4. Retail – 9.5%: Major part of Retail is built recently
5. Consumer Discretionary – 5.5%: Major part is built recently
6. Consumer durables – 4.5%: Major part is built recently
7. QSR – 3%: Major part is built recently
8. IT – 6.5%: Major part is built recently
9. Manufacturing/Energy – 2.5%: Major part is built recently
As it can be seen almost 60% of portfolio composition is relatively older with FMCG (midcaps), Insurance & Adhesives – All decent performers so far.
Remaining 40% is built rather recently with significant exposure to Retail, QSR, Consumer Discretionary/Durables, IT & lastly Manufacturing/Energy.
I see approx. 50% of portfolio in FMCG (Midcaps) + Insurance providing stability and inflation beating compounding (Better than all other asset classes)
Remaining 50% can provide a better placement for riding any subsequent bull market.
In this part, conviction levels are strong in Retail + QSR + Consumer Discretionary + IT + Adhesives/Paints + Manufacturing/Energy (almost 45%)
Not sure about Consumer Durables part – Seems that they are incapable of handling the cost part well and lack superior pricing powers as well. Savings grace may be if India becomes the manufacturing hub for rest of world for some durables – Then these companies can well be part of Manufacturing piece as well.
Action Items –
- To keep evaluating Consumer Durables piece
- Think of increasing exposure to Manufacturing/Energy
- Real Capital Goods is completely missing. Some real good companies in this space which I admire a lot but missed their decent rally till now because of my avoiding this sector…I was not so right in hindsight. Good companies, irrespective of sectors, are good companies and deserve a place. What better time when sector is not doing good…Need to find right time to get exposure to 1 Capital Goods company. I like tech players here as well…that is if there is any right time…
- Defense – Need to read more about this and look for opportunities, if any
- Lat but not least – Keep evaluating high exposure to FMCG + Insurance. Monitor the companies as these may be relatively slow growers going ahead.
Views welcome on sectoral composition and how well/not so well placed I may be to benefit from any bull market.
Disc: Invested in above sectors/companies, hence biased. Above views only for academic purposes. Not a buy/sell recommendation. Not eligible for any recommendation.
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