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Kaustubh Belapurkar: Yes, I think that’s the general if he isn’t outlined some of the reasons as to why. So, I Rushabh has very, very nicely articulated that there is a lot of merit in looking at healthcare stocks, and obviously, the opportunity is huge when we were growing economy. Healthcare needs are increasing and all of that is great, but I think from an investor’s perspective, and I think Rushabh will also touch upon at that, timing becomes very, very crucial because we have just done a very simple analysis of looking at a sectoral rotation that happens in markets. So, you have different sectors coming to the fore, but from time to time.
So, for instance, 2016-19 was actually an exceptionally bad time for healthcare stocks and then 2020, you have this huge run up in healthcare, are we being the best performing sector along with IT? But the last few years have again been challenging at least from a price perspective on the stocks calendar years of ’21 and ’22.
So, the challenge is from an investor’s perspective, and like you asked if the investor does not have the wherewithal to understand, the semantics of the sector, which Rushabh I think very cleanly articulated, or doesn’t understand when to get in, then that’s a huge challenge, because often when we’re choosing the right and we have seen this in data, you know, which maybe not so much or healthcare or we saw this especially in the technology side, but you know, probably played out in healthcare too.
But a lot of money came into healthcare funds and technology funds after the run up in the segment, it already happened because the sector posted great returns, investors who got into just purely looking at the past performance. But that’s the challenge because they have come in and misplaced expectations and they have obviously been disappointed over the last couple of years and that is the biggest challenge that we need to address if you as an investor cannot take that call. Either you could work with a financial adviser who can guide you and even if you do want to take exposure, keep it limited as a part of your portfolio…
We have seen portfolios that people end up buying 20-30% of a sectoral exposure, which is massively dangerous because you’re so lopsided in your returns as an investor or it can be boom or bust and you know, that’s the challenge. Look at our outline because we’ve seen that happen with a lot of investors purely looking at past performance and coming in off the sector and buying into funds and you know, that’s something which an investor should definitely keep away from.
The other thing obviously even your diversified equity managers will take graded, albeit graded, they will take greater weight underweight calls within their own… equity funds. So it’s not going to be one is zero obviously, but they are positive in a certain sector, be it healthcare or otherwise, they would kind of look at i
Just a last bit on timing and maybe the interesting bettors/bidders, given that we have had difficult years of healthcare, and I am just putting it out there. It might not necessarily be such a bad time to think about it. I mean, in conjunction with what Rushabh has already outlined, but you need to be patient… because there could be a couple more years before the price movement of the stock happens and so I think that’s something that investors need to keep in mind. I would definitely not be recommending someone to get into healthcare, say in the age of 20-21 when the market had already moved significantly. That will be the time to probably book some profits. So that’s just my two bits on you know, sectoral funds, as a general rule.
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