Best to stay away from short-term tactical trades, says UTI AMC’s Vetri Subramaniam

It’s best to stay away from short-term tactical trades, said Vetri Subramaniam, group president & head-equity at UTI Asset Management Company, on Thursday.

Speaking in an interview with CNBC-TV18, he said, “The way we at UTI Mutual Fund run all our schemes, we do not tilt at short-term tactics. Through the pandemic, last year, our average portfolio turnover ratio stayed within historical ranges. Some of the schemes are 10-15-20 percent, which tells you that our thought process is more long-term oriented.”

On inflation, Subramaniam said, “Central banks across the world are taking a view at this point in time that what you are seeing in terms of inflation pressures is transient. Why is this happening- there is a school of thought and there is some merit to this, that as the pandemic has faded into the background, people have not been able to spend the money that they normally would on experiences, services, travel, leisure. So, a lot of that spending got directed towards the goods economy.”

“So, demand for goods has been strong, and across the world, supply chains have struggled to get back because there have been rolling lockdowns. Not every business within the supply chain has been able to get up to optimal levels of functioning. So, I do think there is some merit that what you are seeing now is transient in terms of inflationary pressures. It’s certain that the central bankers and monetary policy bodies are all thinking that way and perhaps that is what is giving the market some confidence to look through this,” he said.

For the entire interview, watch the video.