Active large-cap funds can outperform in next 3-5 years: Ashwini Shami

Largecap funds are seeing consistent outflows, while investors are ploughing money in mid- and small-cap schemes. However, Ashwini Shami, president & chief portfolio manager at OmniScience Capital, expressed concerns over SMIDs' rich valuations and rather finds active large-cap schemes focusing on mispriced pockets in top-100 stocks better placed in the next 3-5 years. Furthermore, he shares his outlook with Saloni Goel in an email interview on the Fed’s next move, the defence stocks' rally, and sectors that could offer better opportunities for investors. Edited excerpts:

The Fed is slated to meet in mid-September. What are your expectations on the rate hike front and possible implications for Indian stock markets? 

There is a higher probability of a 25-basis-point increase compared to the status quo on policy rates. An important input for the committee will be the core CPI number, which is scheduled to come out on 11th September. While the core CPI is currently expected to remain in line with last month's reading, crude prices moving closer to $100 per barrel over the last few weeks have raised inflation concerns. The robust jobs data has also significantly increased the expectation of an interest rate hike. 

Why is the last two months' FII buying not reflected in Nifty stocks? 

While FIIs turned net buyers in the months of July and August 2026, the quantum of net buying was significantly lower than the net selling observed over the preceding four months. In the current month, FIIs have again turned net sellers as yields on US Treasuries went up by 15–20 bps over the last two weeks. Additionally, mutual fund flows indicate that large-cap schemes have seen continuous net outflows over the last two months, negating any net buying from FIIs. CHECK |