SIPs one of the most effective ways to ride out uncertainty: DSP’s Aditi Kothari Desai

At the helm of one of India’s oldest asset management franchises, Aditi Kothari Desai represents the modern face of DSP Asset Managers, but her message in today’s volatile market draws firmly from Dalal Street’s time-tested principles: discipline, consistency and patience.

As markets swing amid stalled West Asia peace talks, rising crude prices and macroeconomic uncertainty, the chairperson of a fund house managing Rs 2.30 lakh crore in assets cautions investors against reacting to every headline.

“Timing markets around geopolitical developments is inherently difficult and often counterproductive,” she said in an interview, reiterating that systematic investment plans (SIPs) remain among the most effective ways to navigate uncertain conditions.

While India can absorb moderate increases in oil prices, sustained spikes could revive inflationary pressures by raising input and logistics costs, weighing on macro balances and the currency, she said. By some estimates, every $10 rise in crude adds roughly Rs 1.12–1.40 lakh crore to the country’s import bill.

Geopolitical shocks such as the West Asia conflict may trigger short-term volatility, but they rarely alter the long-term trajectory of equities unless they disrupt global growth, trade or energy supply in a meaningful way, she said.

“Markets are reacting more to uncertainty than to any real change in company earnings, and such reactions have settled down over time in the past,” she said. “Corrections often create opportunities for disciplined investors.”

Her message to SIP investors is clear.

“If you have SIPs, do not stop them,” she said. “Stopping them during corrections will kill the averaging cost effect for which they were made in the first place.”

SIP flows remain largely equity-driven, with more than 80% of 2025 inflows directed toward active equity schemes, while passive strategies account for a much smaller share. At the same time, rising interest in hybrid and multi-asset funds points to a gradual shift toward diversification.

For lump sum investors, Desai, 50, recommends systematic transfer plans (STPs), which stagger investments from liquid to equity funds to manage volatility. Flex STPs take this approach further by dynamically adjusting allocations—deploying more when markets fall and less when they rise.

Desai also advises investors to remain diversified and focus on companies with strong balance sheets and pricing power, which are better positioned to navigate uncertain conditions.

After a sharp correction pushed the Nifty back to levels last seen in September 2021, she cautioned against reading short-term declines as structural damage.

“Corrections can create opportunities, but they are usually evident only in hindsight,” she said, noting that many investors now wish they had invested during the Covid-era market fall. “The same applies today.”

She added that while geopolitical stress and oil shocks have historically supported sectors such as energy, defence and commodities, defensives like FMCG and utilities tend to hold up better, though outcomes are becoming more nuanced in a globally interconnected market.

Desai sees value emerging in financials, particularly private banks, insurance and select housing finance companies.

“The recent correction is a good time to invest in sectors that are not doing well but are still fundamentally strong.”

A recent DSP note showed the Nifty Private Bank index is trading near two times its price-to-book (P/B) ratio, among its lowest levels in a decade, with net NPAs also close to historic lows.

Rather than attempting to position tactically around sectors, investors are better served focusing on the quality of business, its cash flow strength and resilience through cycles, she said. With valuations now closer to long-term averages, the current environment offers opportunities for investors focused on value and quality.

As Desai put it, “The key is discipline and consistency, not reaction.”