ETMarkets FII Talk: This fund manager of Chicago based investment firm with over $1.6 bn in AUM is overweight on India

economictimes.indiatimes.com:

“We currently have an overweight position in India in our EM portfolio. But that wasn’t always the case. We launched the portfolio 5 years back with a marginally underweight position in India,” says Nikhil Rastogi, Portfolio Manager at Kabouter Management which has an AUM of $1.6 bn.

In an interview with ETMarkets, Rastogi said: “We focus our efforts on finding high-quality small-cap companies which we believe are undervalued and relatively unknown in the wider institutional investment community” Edited excerpts:What is the possible fallout on various asset classes after Fitch downgraded the US? The U.S. Treasury Bonds and the US dollar have not moved much after this downgrade as the continued increase in U.S. debt is already well known.

So, we don't think this event alone will impact asset prices much. The main driver for the global markets currently is the trajectory of inflation and the risk of economic slowdown. Having said that, investors should pay attention to the outperformance of the U.S.

dollar against all major currencies over the last decade. Though currency cycles are long and it’s difficult to forecast their timing, history suggests that an eventual reversion to the mean happens, and when that happens, we would expect that international currencies and stocks will benefit, as we have seen during previous cycles over the last 30 years.With the Indian market near record highs, how are you looking at India in your EM portfolio? We currently have an overweight position to India in our EM portfolio. But that wasn’t always the case.