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Time of India
6 days ago
- Business
- Time of India
Weaker dollar story taking a breather but more weakening possible in quarters ahead: BlackRock's Gargi Chaudhuri answers
Gargi Chaudhuri , Chief Investment and Portfolio Strategist, Americas, BlackRock , says the dollar's significant decline in the first half of the year, driven by international investor shifts and concerns over tariffs and deficits, has paused. Despite a recent rally, historical patterns suggest further weakening in the coming quarters. Investors should consider positioning themselves in international trade and sectors like tech that benefit from a weaker dollar . You have highlighted the need for domestic exposure and diversification, what is the model portfolio in the current day scenario going to be like? How much to which country? Gargi Chaudhuri: I am not going to go into percentages. The starting point depends on who you are and what you have and what your investment goals are. But what we have found just looking at a lot of US advisor portfolios is if you look at a broad benchmark, call it the MSCI ACWI, it has a significant number of international countries, international equities there and most advisors are about 10-20% underweight of the MSCI ACWI amount. So the starting point is that of being underweight versus a benchmark. 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We think all of that makes a lot of sense. Again, keeping your starting point in mind and recognising how much US you might be having as a starting point, to be clear, this is not a story about wholesale moving away from US largecap . This is a story about adding countries like Japan, India and China into your portfolio in a way that you might not have. Frankly, this is also a story about adding fixed income assets into your portfolio. This is the first time in decades, literally multiple decades, where you have been able to earn 6-6.5% in international fixed income for US investors without taking too much credit risk. You can add a diversified source of interest rate and credit and securities risk to add that very high 6% or 7% yield for being better quality and investors should be focused on fixed income markets alongside a diversified international basket. The other interesting phenomena which is playing out pretty much across global economies is sector concentration. It is no more those broadening out days that we had since the covid recovery was playing out, I mean look at us, it is all about AI tech. When you talk about India, it is largely financial or infrastructure. Is that style of investing prudent right now? Gargi Chaudhuri: I will comment on the US where often it is thought of as a bug, but it is actually a feature. The fact that you are having these AI and tech names and obviously we are in the middle of earning season, but the fact is these are the largest companies in the world that are able to continue to show that the hundreds of billions of dollars that they have spent in capex is now giving them that ROI in terms of double-digit growth in revenue. Live Events You Might Also Like: Is 25% tariff on India the worst-case scenario? How long will it take markets to price that in? BlackRock's Gargi Chaudhuri answers Again, these are multiple billion dollar revenue companies to begin with. This is a feature not a bug. Everyone tries to push back on this. Everyone wants to see this broadening narrative. Yes, I would say that some pockets of broadening are taking place. Even in the US and much like you mentioned in India, industrials and financials are up in double digits. But they are still lagging the communication services and tech sectors which is where the earnings growth is and to the extent that more and more of us are going to be using AI to become more productive, to become more efficient and this is going to generate revenue and profitability for many sectors. But for now, this is a story about being able to monetise this incredible new technology in some meaningful ways and it is showing up in earnings. Where does the dollar come in the picture because it has been on a decline. Do you sense that that is a tactical move or is it more of a structural story about the slip in dollar? Gargi Chaudhuri: That was the story of the first half of the year where we had that significant decline in the dollar. A lot of forces are underpinning that. We talked about some related to international investors moving away from the US. Certainly, there were concerns around tariffs and deficits. We have seen that selloff arrested a little bit. We have seen the dollar especially over the last few days or weeks rallying back up. Historically, when there are these large moves in currencies, especially in the dollar, they happen in multiple month or multiple year cycles. They do not happen in small increments. It happens across 18 to 24 months. I would not be surprised to see the dollar, after this brief rally that we have seen, continue to move lower. Certainly that is another reason why investors should again think about international trade as a place that can benefit from that weakening USD. You Might Also Like: A three-part deal with US can be explored; India unlikely to eliminate all tariffs on American exports: Sunil Subramaniam Think about areas in even the US markets, which is tech, that can benefit from a weaker currency because of the revenues that they get outside of the US. So, the weaker dollar story is certainly taking a breather after a significant weakening in the first half of the year. But there could be some more weakening in the quarters ahead and investors should position themselves for that starting now. You Might Also Like: We can't be sure 25% will be Trump's final tariff; India should have taken tougher stand like China: Swaminathan Aiyar
Economic Times
6 days ago
- Business
- Economic Times
Weaker dollar story taking a breather but more weakening possible in quarters ahead: BlackRock's Gargi Chaudhuri answers
Gargi Chaudhuri, Chief Investment and Portfolio Strategist, Americas, BlackRock, says the dollar's significant decline in the first half of the year, driven by international investor shifts and concerns over tariffs and deficits, has paused. Despite a recent rally, historical patterns suggest further weakening in the coming quarters. Investors should consider positioning themselves in international trade and sectors like tech that benefit from a weaker dollar. ADVERTISEMENT You have highlighted the need for domestic exposure and diversification, what is the model portfolio in the current day scenario going to be like? How much to which country? Gargi Chaudhuri: I am not going to go into percentages. The starting point depends on who you are and what you have and what your investment goals are. But what we have found just looking at a lot of US advisor portfolios is if you look at a broad benchmark, call it the MSCI ACWI, it has a significant number of international countries, international equities there and most advisors are about 10-20% underweight of the MSCI ACWI amount. So the starting point is that of being underweight versus a benchmark. When you are thinking outside of your home country, adding international allocations whether it is countries like India and China or countries like Japan as well as European financials. We think all of that makes a lot of sense. Again, keeping your starting point in mind and recognising how much US you might be having as a starting point, to be clear, this is not a story about wholesale moving away from US largecap. This is a story about adding countries like Japan, India and China into your portfolio in a way that you might not have. Frankly, this is also a story about adding fixed income assets into your portfolio. This is the first time in decades, literally multiple decades, where you have been able to earn 6-6.5% in international fixed income for US investors without taking too much credit risk. You can add a diversified source of interest rate and credit and securities risk to add that very high 6% or 7% yield for being better quality and investors should be focused on fixed income markets alongside a diversified international basket. The other interesting phenomena which is playing out pretty much across global economies is sector concentration. It is no more those broadening out days that we had since the covid recovery was playing out, I mean look at us, it is all about AI tech. When you talk about India, it is largely financial or infrastructure. Is that style of investing prudent right now? Gargi Chaudhuri: I will comment on the US where often it is thought of as a bug, but it is actually a feature. The fact that you are having these AI and tech names and obviously we are in the middle of earning season, but the fact is these are the largest companies in the world that are able to continue to show that the hundreds of billions of dollars that they have spent in capex is now giving them that ROI in terms of double-digit growth in revenue. Again, these are multiple billion dollar revenue companies to begin with. This is a feature not a bug. Everyone tries to push back on this. Everyone wants to see this broadening narrative. Yes, I would say that some pockets of broadening are taking place. ADVERTISEMENT Even in the US and much like you mentioned in India, industrials and financials are up in double digits. But they are still lagging the communication services and tech sectors which is where the earnings growth is and to the extent that more and more of us are going to be using AI to become more productive, to become more efficient and this is going to generate revenue and profitability for many sectors. But for now, this is a story about being able to monetise this incredible new technology in some meaningful ways and it is showing up in earnings. Where does the dollar come in the picture because it has been on a decline. Do you sense that that is a tactical move or is it more of a structural story about the slip in dollar? Gargi Chaudhuri: That was the story of the first half of the year where we had that significant decline in the dollar. A lot of forces are underpinning that. We talked about some related to international investors moving away from the US. Certainly, there were concerns around tariffs and deficits. We have seen that selloff arrested a little bit. We have seen the dollar especially over the last few days or weeks rallying back up. ADVERTISEMENT Historically, when there are these large moves in currencies, especially in the dollar, they happen in multiple month or multiple year cycles. They do not happen in small increments. It happens across 18 to 24 months. I would not be surprised to see the dollar, after this brief rally that we have seen, continue to move lower. Certainly that is another reason why investors should again think about international trade as a place that can benefit from that weakening USD. Think about areas in even the US markets, which is tech, that can benefit from a weaker currency because of the revenues that they get outside of the US. So, the weaker dollar story is certainly taking a breather after a significant weakening in the first half of the year. But there could be some more weakening in the quarters ahead and investors should position themselves for that starting now. 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Yahoo
26-07-2025
- Business
- Yahoo
Does Okta (OKTA) Offer an Attractive Risk-Reward Profile?
Sands Capital, an investment management company, released its 'Sands Capital Technology Innovators Fund' Q2 2025 investor letter. A copy of the letter can be downloaded here. Technology Innovators focus on pioneering businesses worldwide that serve as key drivers or beneficiaries of significant long-term changes driven by technology. The fund returned 26.0% (net) in the second quarter compared to a 21.9% return for the benchmark, MSCI ACWI Info Tech and Communication Services Index. Easing geopolitical concerns, renewed AI optimism, resilient macroeconomic data, strong corporate earnings, and technical tailwinds boosted the markets for a quick recovery in the quarter. You can check the fund's top 5 holdings to know more about its best picks for 2025. In its second quarter 2025 investor letter, Sands Capital Technology Innovators Fund highlighted stocks such as Okta, Inc. (NASDAQ:OKTA). Okta, Inc. (NASDAQ:OKTA) is an identity partner that offers products and services to manage and secure identities. The one-month return of Okta, Inc. (NASDAQ:OKTA) was -0.24%, and its shares gained 5.13% of their value over the last 52 weeks. On July 24, 2025, Okta, Inc. (NASDAQ:OKTA) stock closed at $97.89 per share, with a market capitalization of $17.138 billion. Sands Capital Technology Innovators Fund stated the following regarding Okta, Inc. (NASDAQ:OKTA) in its second quarter 2025 investor letter: "Okta, Inc. (NASDAQ:OKTA) remains the leading independent provider of enterprise identity and access management software, based on revenue and breadth of integrations. Shares declined after first-quarter results showed current remaining performance obligations (cRPO) rose 14 percent year-over-year, slightly below investor expectations. Management also issued softer-than-expected cRPO guidance for 2026. While Okta has not yet reaccelerated top-line growth, we believe the business presents an attractive risk-reward profile. Our outlook rests on the view that better sales execution and a broader product suite will support Okta's effort to capture more of the enterprise opportunity—its top strategic priority." A mobile application developer programming on a tablet, illustrating the power of the company's adaptive multi-factor authentication. Okta, Inc. (NASDAQ:OKTA) is not on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 65 hedge fund portfolios held Okta, Inc. (NASDAQ:OKTA) at the end of the first quarter, which was 72 in the previous quarter. While we acknowledge the potential of Okta, Inc. (NASDAQ:OKTA) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. In another article, we covered Okta, Inc. (NASDAQ:OKTA) and shared the list of best SaaS stocks to buy according to analysts. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors. READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money. Disclosure: None. This article is originally published at Insider Monkey.
Yahoo
26-07-2025
- Business
- Yahoo
Visa (V) Fell Amid Broad Sell-Off in Card Network Stocks
Sands Capital, an investment management company, released its 'Sands Capital Technology Innovators Fund' Q2 2025 investor letter. A copy of the letter can be downloaded here. Technology Innovators focus on pioneering businesses worldwide that serve as key drivers or beneficiaries of significant long-term changes driven by technology. The fund returned 26.0% (net) in the second quarter compared to a 21.9% return for the benchmark, MSCI ACWI Info Tech and Communication Services Index. Easing geopolitical concerns, renewed AI optimism, resilient macroeconomic data, strong corporate earnings, and technical tailwinds boosted the markets for a quick recovery in the quarter. You can check the fund's top 5 holdings to know more about its best picks for 2025. In its second quarter 2025 investor letter, Sands Capital Technology Innovators Fund highlighted stocks such as Visa Inc. (NYSE:V). Headquartered in San Francisco, California, Visa Inc. (NYSE:V) is a payment technology company. Visa Inc. (NYSE:V) shares returned 1.54% over the past month and appreciated by 36.43% over the last 12 months. On July 24, 2025, Visa Inc. (NYSE:V) stock closed at $353.97 per share, with a market capitalization of $691.48 billion. Sands Capital Technology Innovators Fund stated the following regarding Visa Inc. (NYSE:V) in its second quarter 2025 investor letter: "Visa Inc. (NYSE:V) operates the world's largest retail electronic payment network. Shares declined in June amid a broader selloff in card network stocks following stablecoin-related headlines. Unlike the market, we do not view stablecoin proliferation as a threat to card volumes; in fact, we believe it could expand the addressable market for card networks. While stablecoins may have utility in cross-border business-to business transactions, we think they are unlikely to disrupt consumer-to-merchant payments, where cards offer a compelling value proposition—rewards, liquidity, ubiquity, buyer protections, and trust. Moreover, card networks could enhance stablecoin adoption by providing the rules, protections, and services needed for broader, mainstream use." A close-up of a credit card being swiped on a payment terminal, reflecting the company's payments technology. Visa Inc. (NYSE:V) is in 6th position on our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 165 hedge fund portfolios held Visa Inc. (NYSE:V) at the end of the first quarter, which was 181 in the previous quarter. In Q1 2025, Visa Inc. (NYSE:V) reported $9.5 billion in net revenue, up 10% year-over-year. While we acknowledge the potential of Visa Inc. (NYSE:V) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. In another article, we covered Visa Inc. (NYSE:V) and shared the list of stocks Jim Cramer recently discussed. In its Q2 2025 investor letter, Aristotle Atlantic Focus Growth Strategy cited the same reason for Visa Inc.'s (NYSE:V) decline in the quarter. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors. READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money. Disclosure: None. This article is originally published at Insider Monkey.
Yahoo
24-07-2025
- Business
- Yahoo
Growth in Azure Lifted Microsoft Corporation (MSFT) in Q2
Sands Capital, an investment management company, released its 'Sands Capital Technology Innovators Fund' Q2 2025 investor letter. A copy of the letter can be downloaded here. Technology Innovators focus on pioneering businesses worldwide that serve as key drivers or beneficiaries of significant long-term changes driven by technology. The fund returned 26.0% (net) in the second quarter compared to a 21.9% return for the benchmark, MSCI ACWI Info Tech and Communication Services Index. Easing geopolitical concerns, renewed AI optimism, resilient macroeconomic data, strong corporate earnings, and technical tailwinds boosted the markets for a quick recovery in the quarter. You can check the fund's top 5 holdings to know more about its best picks for 2025. In its second quarter 2025 investor letter, Sands Capital Technology Innovators Fund highlighted stocks such as Microsoft Corporation (NASDAQ:MSFT). Microsoft Corporation (NASDAQ:MSFT) is a multinational software company that develops and supports software, services, devices, and solutions. The one-month return of Microsoft Corporation (NASDAQ:MSFT) was 1.69%, and its shares gained 20.91% of their value over the last 52 weeks. On July 23, 2025, Microsoft Corporation (NASDAQ:MSFT) stock closed at $505.87 per share, with a market capitalization of $3.76 trillion. Sands Capital Technology Innovators Fund stated the following regarding Microsoft Corporation (NASDAQ:MSFT) in its second quarter 2025 investor letter: "Microsoft Corporation (NASDAQ:MSFT) is a leading global software and cloud infrastructure business. The company delivered better than-expected quarterly results, with a reacceleration in Azure growth as the key highlight. Demand for AI-related services remains strong, and Microsoft also benefited this quarter from sequential improvement in non-AI-related Azure revenue. We believe Microsoft is well positioned to facilitate and benefit from enterprise adoption of AI services, both at the infrastructure and application layers." A development team working together to create the next version of Windows. Microsoft Corporation (NASDAQ:MSFT) is in second position our list of 30 Most Popular Stocks Among Hedge Funds. As per our database, 284 hedge fund portfolios held Microsoft Corporation (NASDAQ:MSFT) at the end of the first quarter compared to 317 in the previous quarter. In the fiscal third quarter of 2025, Microsoft Corporation (NASDAQ:MSFT) reported $70.1 billion in revenues, up 13% year-over-year. While we acknowledge the potential of Microsoft Corporation (NASDAQ:MSFT) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock. In another article, we covered Microsoft Corporation (NASDAQ:MSFT) and shared the list of AI stocks in the spotlight. In addition, please check out our hedge fund investor letters Q2 2025 page for more investor letters from hedge funds and other leading investors. READ NEXT: The Best and Worst Dow Stocks for the Next 12 Months and 10 Unstoppable Stocks That Could Double Your Money. Disclosure: None. This article is originally published at Insider Monkey. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
