The best way to navigate volatility is through systematic investment plan (SIP) or systematic transfer plan (STP), said S Naren, ED & CIO of ICICI Prudential AMC, adding historically, election years have been volatile.

According to him, the markets are not overvalued currently and in the last one year, both midcaps and smallcaps have become cheaper and are now more fairly valued. Within largecaps, baring the ten megacaps, the market has become cheaper, he added.

"Baring the PSU pack, the rest of the market is fairly valued and it is better to invest systematically," he advised.

He is of the clear view that the time to nibble has come but not a time to take a big call on equities. "Investing through SIP/STP means you are comfortable nibbling. One can look at nibbling into small and midcaps because they have become much cheaper," he said.

The house is very positive on banks compared to housing finance companies and non-banking financial companies, especially banks with good CASA franchise. “Banks had a bad period for a long period of time - seven years and so no reason that the outperformance should get over three-six month period,” he said.

Sharing his rationale for being upbeat on credit funds, he said, “We look at three things fear, valuations and flows.

First Published:Feb 14, 2019 12:24 PM IST