DSP Mutual Fund sees opportunity in rupee assets

DSP Mutual Fund believes the current market environment presents an attractive opportunity for investing in rupee-denominated equities and bonds despite concerns around crude oil prices, foreign fund outflows and rupee weakness.

In a recent investment note, the fund house highlighted five reasons supporting Indian assets, including cyclical currency movements and the undervaluation of the rupee based on the Real Effective Exchange Rate (REER).

DSP Mutual Fund said the rupee’s REER has fallen sharply, creating what it described as a strong margin of safety for investors allocating to domestic assets. The fund house also argued that betting against the rupee at current levels may be a low-probability strategy.

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