 "Vaibhav Sanghavi, chief executive officer at ASK Hedge Solutions | Photo: Kamlesh Pednekar")
It has been a volatile calendar year 2025 for the markets thus far. Vaibhav Sanghavi, chief executive officer at ASK Hedge Solutions, tells Puneet Wadhwa over a telephone conversation that India would be one of the very few countries that will do very well in a global environment where almost all countries will be struggling for reasonable growth. Edited excerpts:
Do you expect the markets to trade sideways over the next few months in the absence of triggers? What probability do you attach to the Nifty ending closer to the 20,000 mark by the end of December 2025?
On a longer-term basis, markets generally move in line with overall earnings growth. However, in the shorter term, they are governed by many variables, prominently including the underlying geopolitical situation. As these conflicts get resolved, markets will gain confidence that normalcy will resume and subsequently may move higher. We are already witnessing green shoots in terms of economic growth. On the likelihood of Nifty ending closer to 20,000 by December 2025, it seems very unlikely.
How does one make money in a sideways/lacklustre market?
If your investments are in equity as an asset class, then I would recommend investors refrain from focusing on the short term. We have ample empirical evidence proving the advantages of long-term investing. However, if an investor is looking at overall asset allocation, then diversification into other asset classes, depending on financial goals and risk appetite, may help the overall cause.
Can retail investors focus their attention on the primary markets in case the secondary markets remain subdued?
It is not about whether it is a primary or secondary market. The approach ideally should be to invest in companies with good businesses at reasonable valuations. Primary markets do give a favourable opportunity to allocate at reasonable valuations. Concerning small and medium enterprises or low-ticket offers, it is important to do proper research before venturing into those offerings.
What has been your strategy since October, when the markets peaked and then started to slip?
We are a long-short fund, wherein our focus is on generating risk-adjusted returns. From our perspective, we are in some ways agnostic to market movements. Thus, despite extremely turbulent markets since October, we have been able to navigate effectively without a single month of negative returns since then. What worked for us is our extremely tight control over the amount of net exposure we have taken during this time.
Some expect the Sensex to hit the 300,000 mark in 10 years. Far-fetched or remotely possible? If so, what will it take for the Sensex to get there?
Our long-term average return on the benchmark indices has been around 14 per cent. If growth continues at this pace over the next 10 years, it is possible that the Sensex would reach the 300,000 mark by then.
As we look towards the next decade, the power of innovation, demographics, and reforms should lead us to strong growth. India would be one of the very few countries that will do very well in a global environment where almost all countries will be struggling for reasonable growth.
Which sectors and stocks will big money chase over the next few months?
It is very difficult to predict which sectors are likely to move in the next few months. However, over a 12- to 24-month period, sectors like consumer discretionary and staples, financial services, and information technology are likely to perform well.
From a foreign flow perspective, India would receive much better inflows compared to the previous three years. This is based on the fact that foreign ownership is almost at a decadal low, and with prospects of the US dollar weakening, there can be aggressive allocations to emerging markets.
Is it better for investors to opt for quant strategies and funds now rather than go the traditional way?
Quant strategies are a great way to invest, keeping cognitive biases at bay. In our experience, directional strategies with a concept of trend following have the ability to add great value to portfolios. As education about these strategies increases, there will be many takers.
Big money moves: India’s next growth frontiers
- Short-term sector shifts remain unpredictable
- Consumer, financials, and IT set to lead over 12-24 months
- Foreign capital ready to mount a strong upswing in India
- Foreign ownership at decade-low — prime for fresh inflows
- Weakening US dollar driving renewed interest in emerging markets
