We are slightly overweight in IT, selective in private banks: UTI MF's Ajay Tyagi

Having navigated numerous cycles of booms and busts over his 25-year tenure at UTI Mutual Fund, Ajay Tyagi knows when markets drift from fundamentals. The recent correction "represents a return to some sanity," observes the veteran fund manager, reflecting his seasoned understanding of market excesses. Beginning his career tracking IT and Telecom sectors in 2000, Tyagi now heads the equity division at UTI, overseeing key funds like UTI Flexi Cap Fund and UTI Unit Linked Insurance Plan, with assets worth approximately Rs 33,300 crore. In this interview, he shares his scepticism about the recent market rally, particularly in mid and small caps since the latter half of 2023. He explains why the market needed a correction and discusses his preference for private sector banks and IT services companies. Below is the edited transcript of our discussion. You have been managing the UTI Flexi Cap Fund since 2016; the eight-year period is quite a long time. How has your journey as an investor been, and how has your investment philosophy evolved over the years? I began my journey with UTI in 2000, marking approximately 25 years at this fund house. I joined the team as an analyst, and my responsibilities included tracking sectors such as IT and telecom back then. The growth journey of the IT sector had a significant influence on me and my perspective on investing, even in the early days. For me, the focus was on businesses that were growing profitably, creating value and compounding that value year after year. This greatly influenced the philosophy I employ in managing my funds today. As an investor, the most dependable way to select a business is to go for the one that effectively addresses customer problems, doing so in a profitable manner and entering the industry at an early stage to ensure sustained growth over an extended period. In essence, my philosophy revolves around businesses creating economic value, compounding that v