'No sector or asset class performs well every year'

Model-driven vs human-led portfolios?

A lot of pre-investment screening and filtration can be done with technology today. As markets evolve and become more efficient, alpha generation becomes a challenge in well-researched spaces like large caps. Going forward, the human edge will be key to underinvested segments, such as small and micro caps, where the risk-reward ratio is relatively higher.

Post-stress test safeguards?

We’ve been conservative and conscious of risk and scalability as the two most important aspects while building portfolios. For us, as in many other areas, this was another corroboration.

On low-friction investing and investor churn.

Performance chasing is a common behaviour exhibited by investors. Funds or asset classes that yielded higher returns in recent years usually receive higher inflows. Consequently, funds with higher star or analyst ratings may also get better responses. Historic evidence suggests no single sector or asset class performs well every year. Thus, it would serve investors well to follow an asset allocation-driven approach.

Furthermore, new investors must avoid equating the NFO price of Rs 10 with stock prices, as a lower NAV doesn’t mean that those funds are available at a cheap price.

We launched our hybrid funds with a well-defined and transparent investment model. Further, we have always positioned our funds as solutions to investors’ different goals and the holding period they should commit to while investing in them.

Rapid-fire questions

• One AMC you admire (not yours): PPFAS and ICICI Prudential AMC.
• One hot product trend you’re glad to have skipped for your investors: Sector or too narrowly defined thematic funds.
• One fund manager, past or present, you would love to have on your team: Each fund manager is unique, but I have been lucky to have seen some tremendous talent across my time in different fund houses: Harshad Patwardhan, Prashant Jain, Anup Maheshwari and most recently Vinay Paharia.
• Beyond returns, one criterion you want investors to judge your AMC on: Transparency.
• If not at running an AMC, what would you be doing? In a farm with my pack of wilds, exploring, learning and appreciating nature.

This article was originally published on October 26, 2025.