Portfolio Construction Strategy
The construction of a strategy for a portfolio involves a lot of studies. The important one is Qualitative screening.
Qualitative screening is based on-
The niche area implies that some companies find their strong domain of operations and become leaders in that area. For instance, AI engineering is a global leader in ferrochrome alloys. It goes into most of the mining sector and it remains amongst the top two companies in the world.
When we consider cost leadership, we have clearly seen for example the telecom space where Indian players are one of the lowest cost telecom players in the world.
So, find which companies have such dominance and have maintained their dominance. Typically it is seen that to have more stable portfolios especially in volatile times, it is good to have a 50 to 65 percent kind of portfolio in the large-cap space because that gives the portfolio a lot of stability even during tough macroeconomic environments.