You have just started off as a fund manager. How prepared are you for this role? How will your experience in broking help?
The broad investment format remains the same for both mutual funds and PMS (Portfolio Management Services). In both of these businesses we invest based on fundamental research and analysis. The idea is to create a portfolio which will include stocks that look good from the medium- to long-term perspective based on fundamental research, macro analysis and a combination of these factors.
What is the investment strategy followed in Peerless Equity fund?
Our strategy for this scheme is to have a diversified portfolio across various sectors, without any sector or industry bias. For example, in 2012, we were overweight on FMCG as there was no point going into aggressive or high beta sector. But now with markets moving out of uncertainties we feel banking and financials would do well. And, now we have are overweight on banking and financials. Although the tilt is towards large-cap, we would have good amount of mid- and small-cap stocks, depending on the market scenario. However, 60 per cent of our portfolio still remains in large-cap stocks. While managing the Peerless Equity fund, we filter sectors based on the top-down approach and then identify stocks based on the bottom-up approach.
What is included in the portfolio and what is avoided?
Presently, we are bullish on banking and the financial sectors as these are core economy sectors. These are the sectors that drive growth, when the economy turns around. We are positive on NBFCs and automobiles as reversal in interest rates is likely to benefit these sectors. We continue to avoid telecom, power and realty. Although a lot of talk of economic reforms is going on which will lead to infrastructure picking up, we feel more tangible measures need to be taken than mere announcements.
Do you prefer value stocks or growth stocks?
Instead of going for pure value or pure growth stocks, we basically follow stocks with growth at reasonable price approach. This approach is a blend of value and growth stocks. We believe that pure growth stocks will always come at very high cost and in with value stocks, the holding period becomes too long. Hence, a mix of the two at reasonable valuations is the idea.
Why should investors invest in this scheme?
Peerless Equity does not have any market capitalisation or sector bias. It is always seen that whenever market becomes weak large-cap stocks do well and mid-caps outperform large-caps when markets move to new trajectory. We provide this flexibility to investors through this fund. Moreover, we also follow sector rotation, which are all good reasons for investors to consider investing in this scheme.
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