'We have deliberately been avoiding a few sectors in our fund'

With nearly 24 years at UTI Mutual Fund, Ajay Tyagi has built his investment strategy around a steadfast commitment to a consistent philosophy. Rather than shifting with market trends, he believes that sticking to a clear investment approach focused on quality and long-term value leads to more rewarding outcomes. This disciplined approach means avoiding the temptation to chase short-term gains or blindly following what the market is rewarding, even if it leads to temporary underperformance, as seen in his flexi-cap fund. Presently, Tyagi leads the equity division at UTI, overseeing funds such as the UTI Flexi Cap Fund. In this interview, he discusses the factors behind the subpar performance of his flexi-cap fund and explains why he isn't overly concerned about it. Tyagi also delves into his investment philosophy, his insights on the current economic landscape and lessons learned from periods of underperformance. 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 the fund house. I joined the team as an analyst, and my responsibilities included tracking sectors such as IT and Telecom back then. The IT sector's growth journey significantly influenced 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 value and ultimately leveraging this entire journey, leading to the compounding of market value for their stock prices. As the manager of a large flexi-cap fund, how do you plan to improve consistency in performance, which has been lacking recently? Let me begin by discussing our definition of