Though tilted towards smaller fare, Subramaniam’s approach to mid and small caps is biased in favour of growth, quality of balance sheet and strength of underlying cash flow. So in 2008, despite not fleeing to large caps and cash, this fund stemmed its fall. Unfortunately, it was not so lucky in 2009.
“The early part of the bounce back was led by global cyclicals to which we had a lower exposure. Also value oriented strategies and companies with distressed balance sheets witnessed a much sharper rise when the market went from pricing insolvency to pricing in survival,” explains Subramaniam.
The base universe is the BSE200 to which companies in the CNX Midcap and handpicked from BSE Small Cap and BSE PSU indices are added. Since momentum and cyclical plays are avoided, one will have to wait for the bets to play out, but the track record shows that they will.
This article was originally published on April 25, 2012.
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