Expert view: Riddhiman Jain, Managing Director (MD) and Head - Investment Strategy and Solutions at Waterfield Advisors, believes developed markets now offer higher growth and higher ROE. In an interview with Mint, Jain said Q1 showed little to no impact of oil prices, so Q2 and Q3 become the key watch for inflation. Edited excerpts:
At the index level, it has been a tough year, and a tough two years. The Nifty is down about 13% YTD. US tariffs, the West Asia war, crude oil prices, the anti-AI trade and rupee volatility all hit at once. Beneath the headline, stock-specific opportunities in defence, power and autos were immense.
Asset allocation made the difference: REITs, InvITs, performing credit, private equity and gold anchored absolute returns. With just two months of the year left and the US midterms ahead, volatility will stay, so returns are unlikely to be linear.
The issue is relative growth more than a lack of innovation. Over the last two years, nominal GDP growth in the developed world has risen while India's has stayed flat or slipped.
Three forces drove that: (i) AI-led spending in the US, (ii) corporate rejuvenation in Japan, and (iii) fiscal expansion in Germany. Developed markets now offer higher growth and higher ROE, even if it is concentrated in fewer names.