'Small caps will drive India's future growth'

Model-driven vs human-led portfolios?

We are currently launching core equity and hybrid products. We may launch model-driven strategies later to complement our fund manager-led strategies.

India has only 100 large-cap and 150 mid-cap companies. The country’s future growth is likely to come from the 4,500+ small-cap stocks. Many small caps have experienced significant growth and become quite large in terms of market size. We believe that alpha in the future will be generated from sectors that are expanding and from fund managers who can navigate the changing business environment in a dynamic manner. Model-based strategies are essentially backwards-looking, while we focus on forward-looking portfolios.

Your first fund and trust playbook?

Our flexi-cap fund allows dynamic allocation across market caps in line with our bottom-up stock-specific approach. Our subsequent products, like the small-cap fund, have generated consistent alpha and helped us diversify our investor and distributor base. We use our Terminal Value framework, which focuses on megatrends, leadership and a company’s ability to generate intangible assets, which are drivers of growth and value.

Investor trust can be built over time with clear communication, credible strategies and consistent experience. We are expanding our distribution network through a hub-and-spoke model and are engaging with more distributors through regular interactions, and value-added workshops.

On low-friction investing and investor churn.

Many new investors are beginning their investment journey through online apps. A distributor/financial planner adds significant value to the investment selection process and long-term portfolio management. While we are present on all digital channels, we are currently more focused on further strengthening our distributor network.

Rapid-fire questions

• One AMC you admire (not yours): Nippon AMC for its relentless customer focus.
• One hot trend you’re glad to have skipped for your investors: Sectoral funds.
• One fund manager, past or present, you would love to have on your team: Rakesh Jhunjhunwala.
• Beyond returns, one criterion you want investors to judge your AMC on: Consistency.
• If not running an AMC, what would you be doing? I would be a film-maker.

This article was originally published on October 27, 2025.