Portfolio Update
As discussed earlier in this thread, i am looking to build large allocation ( 25-30%) to Tier 1 financials. Building large concentrated sectoral allocation in banks has following odds in favour according to my judgement
- Potential to grow earnings at high teens percentage and that too consistently. These 2 factors – high teens earnings growth and consistency – align well with my long term portfolio return expectations of high teen to twenty % with buy and hold approach
- Valuations are comfortable and higher odds of bottoming of derating cycle
- Improves the large cap allocation of the portfolio which further improves the ability to ‘hold’ small mid cap positions
- Not trying to be adventurous in financials because – usually in financials down cycle leaves so much ‘scarring’ that investor becomes reluctant to allocate any money to financials in future cycles thereby missing high teens long term easy compounding story
- Overall I believe this trade has descent risk reward and not asymmetric risk reward which is ok because for my abilities and temperament current environment is not a wicket to hit fours and sixes
- Eventual allocation will have equal weights of around 6-8% to – hdfc bank, icici bank, kotak bank and bajaj finserv
Current portfolio
Suprajit | 20.96% |
---|---|
Ajanta pharma | 20.17% |
Kotak bank | 7.53% |
Hdfc bank | 3.60% |
Bajaj finserv | 3.40% |
Abbott india | 3.18% |
ICICI bank | 3.03% |
HCL Tech | 2.64% |
Mutual funds | 35.4% |
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