REITs, InvITs to play larger role in enhancing portfolio returns: Radhavi Deshpande

Radhavi Deshpande, Chief Investment Officer at Kotak Mahindra Life Insurance, emphasizes the growing significance of Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) in enhancing portfolio returns. In her recent insights, she points out that these investment vehicles offer stable cash flows and improved risk-adjusted returns, making them attractive for long-term investors. As the market matures and liquidity increases, Deshpande suggests that REITs and InvITs will play a more prominent role in investment strategies. She also discusses the current market dynamics, noting that while large-cap stocks show a strong correlation between earnings visibility and valuations, mid and small-cap stocks appear overly optimistic in their growth assumptions. Deshpande highlights the importance of a disciplined approach to asset allocation, particularly in fixed income, where aligning with long-term liabilities is crucial amid fluctuating interest rates. As corporate earnings begin to recover, she remains optimistic about the structural growth potential in India, advocating for investments in companies with strong fundamentals and earnings durability. Overall, Deshpande's outlook for FY27 is cautiously optimistic, underscoring the need for strategic asset allocation in a complex market environment.