Insync portfolio manager Nitesh Patel said Insync currently favours quality Swiss multinationals such as Nestle and Roche, a healthcare company.
The fund manager, he said, is steering clear of Swiss producers who export – such as Swatch – as he believes they face headwinds.
Mr Patel said companies like Swatch have seen their cost base hijacked by the change in currency.
“It will be difficult for Swiss producers who export products to pass on the cost hikes easily,” he said.
“Swatch has some great brands in Omega to Rado and will get over this issue in time but its share price has yet to factor the new normal in currency.”
For companies such as Nestle on the other hand, Mr Patel said this change in currency has only a translational impact rather than an impact to fundamentals.
“A Kit Kat made by Nestle India still sells for the same price today in Mumbai as it did before the Swiss Franc appreciated – the fundamentals of Kit Kat sales in India or Asia have not changed,” he said.
Mr Patel said the fund manager is therefore adding to its long-held stake in Nestle and seriously considering companies such as Roche.
“These Swiss multinationals have a [insignificant] exposure to their home currency apart from translation effects,” said Mr Patel.
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