Nilesh Shah advises investors to focus on quality, avoid smallcap SIPs amid market uncertainty 

​”In those days, when Sunil Gavaskar used to get out, the hopes on rest of the batsmen was very-very low. Today, barring India, most other countries in emerging market like Russia, China, Brazil, South Africa, have not delivered return to investors. Over 20-year period, emerging markets underperformed developed markets,” says Nilesh Shah, MD, Kotak AMC.Exactly a month ago, this market had a lot of event risk, budget, Trump and tariffs, then there was RBI, MPC, and then Delhi elections. Thankfully for us, we have come on the right side of all the individual events. So, if events were making markets nervous and if the events are behind us and we have been on the right side of the event, then do you think it is a matter of time markets will stabilise?Nilesh Shah: So, in our opinion, while there are certain events which are behind us, there are few things which will keep market on the volatile side. One, we are in a world which is increasingly becoming protectionist from globalised, with Trump administration launching newer and newer initiatives for America first, there will be concerns on geopolitical side.If that event risk is not enough, we are also seeing consistent selling from FPI. There is ghar waapsi of global capital to US.We saw one of a large private equity fund going and meeting President Trump and saying that you had asked me to bring $100 billion, here I am bringing $500 billion. Clearly, America first policy and higher interest rates, as well as high bond yields is pushing capital back to America. And finally, emerging market today is like 1980s Indian cricket team. In those days, when Sunil Gavaskar used to get out, the hopes on rest of the batsmen was very-very low. Today, barring India, most other countries in emerging market like Russia, China, Brazil, South Africa, have not delivered return to investors. Over 20-year period, emerging markets underperformed developed markets. So, there is quit emerging market movement also happening. So, in our opinion, markets are likely to remain volatile over near to medium term, based on the geopolitical risk, and also the flows.Like the way you said looks like there is a ghar waapsi when you talk about the FII flows going into the United States. What should investors back home do? Should they look at sectors where the valuation is at comfort at this point in time, most of them talk about banks, that is also where you have a lot of FII positioning?Nilesh Shah: So, for all along, we have always said maintain your asset allocation, do not invest looking at past performance. This is time to invest in quality over momentum. Pick reasonable valuation over expensive valuation, as price is what you pay and value is what you get.And stay away from low floating stock counters where we believe froth is still there despite hefty correction. From a sectoral point of view, midcap IT companies leveraging AI to deliver cheaper, better, and faster solutions to their customer, private banks and NBFCs which are n