Centrum Wealth survey: A recent survey of Chief Investment Officers (CIOs) and fund managers conducted by Centrum Wealth Limited has revealed insights into the current outlook and strategies prevailing in the Indian mutual fund industry.

The survey engaged key decision-makers collectively managing over 80 per cent of the industry's assets, providing valuable perspectives on global and domestic economic dynamics, investment preferences, and risk assessments.

Findings from the survey indicate a cautious sentiment towards global growth, with 67 per cent of respondents expecting weaker growth in 2024 compared to the previous year, primarily due to tight monetary policies. Despite this, respondents remain optimistic about India's growth prospects, with 89 per cent expecting favourable capital inflows into the country.

Projections for India's GDP growth in financial year 2025 (FY25) are positive, with over 75 per cent of participants anticipating growth rates between 6-7 per cent.

Both government and private capital expenditure are identified as key drivers of growth, underlining the importance of investment in sustaining economic expansion.

Equities most favoured

In terms of investment outlook, the majority of respondents foresee earnings growth in their portfolios outpacing Nifty's consensus expectations over the next year. Equities remain the preferred asset class, with 78 per cent of respondents indicating full investment in equities, particularly mega caps which are deemed most attractive.

Sectoral preferences highlight industrials, financials, realty & home improvement, and autos as top-ranked sectors for investment opportunities.

In monetary policy expectations, a major proportion of respondents expect rate cuts both from the US Federal Reserve and the Reserve Bank of India (RBI) in 2024.

In the fixed-income market, respondents expect corporate bond spreads to widen over government bonds in the next six months. Credit quality is seen plateauing in FY25 after improvements in the previous fiscal year.

Long-duration Gilt and dynamic bond funds emerge as favoured fixed-income strategies, reflecting a preference for longer-term investments, the survey said.

Risk assessment underscores concerns over food price shocks as the top risk to the fixed-income market. Furthermore, respondents expect a decline in yields, with a major proportion expecting a sharper fall in short-term yields.

Sandeep Das, MD & CEO, Centrum Wealth said, “By polling CIOs representing over 80 per cent of assets under management, we gain invaluable perspectives on their outlook across asset classes amidst economic uncertainties. Though risks persist globally, India's growth momentum remains positive. As the investment landscape grows more complex, reports like this serve as an essential compass to benefit from the best minds.”

"2024 will be a pivotal year globally and for India,” said R Shankarraman, ED & CIO – Third Party Products, Centrum Wealth.

“With looming elections, normalised economies post-COVID, and tightening policies, markets contend with evolving risks even as climate concerns persist. Based on the survey we observed that there is a broad consensus on India's economic and political continuity, alongside optimism on corporate earnings growth. Within this, moderating equity return expectations strike a note of caution. On fixed income, there is confidence that rate hikes have peaked with expectations of a deferred and shallow rate cut cycle ahead. Easing financial conditions signal opportunities across the spectrum,” Shankarraman added.