“We didn’t really back off from the midcap and smallcap space… we’ve been through the thick and thin and we also probably were not in the camp where we believed in terms of taking those cash calls,” said Taher Badshah, Chief Investment Officer – Equities at Invesco Mutual Fund which manages over $12 billion in assets.
He added that midcap and smallcap exposures have likely gone up over the past few weeks, driven by stock-specific opportunities across both growth and value. “We continue to ideate out there… we are pretty much there. We have only gained at not having actually disrupted the balance of our portfolios, despite the volatility.”
Badshah said sectors such as NBFCs, pharmaceuticals, industrials and defence are among Invesco’s current bets.
He also pointed to opportunities in midcap IT services, especially after the recent correction.
On the macro side, Badshah said foreign investor flows into emerging markets may not be as India-centric going forward, with China also coming back into focus.
“This time around, when flows return to emerging markets, there will be a favour of China too, will be a reasonably decent beneficiary… unlike, let’s say, over the last two-three years, when generally India has dominated the scene.”
He said the evolving nature of the Chinese economy — with more weight on technology and automation — could attract foreign investors who may not find similar exposure in India. “It will be India plus China in terms of flows as we go along… especially if emerging market flows improve on aggregate.”
Badshah also maintained a constructive view on real estate and value retail, particularly in tier 2 and tier 3 markets. “I like real estate… especially after this correction. From a more structural standpoint, we believe that this sector is still in its relatively early stages.”
