Soumendra Nath Lahiri, fund manager, L&T India Prudence, talks about the fund's flexible approach towards sectors as well as market capitalizations.
What is your approach to managing the equity portfolio of this fund?
For the equity part of the portfolio, L&T India Prudence Fund follows a fundamentals driven bottom-up investment approach for stock selection. The scheme has a flexible approach and invests across sectors and market capitalization segments. The fund manager will generally aim to identify stocks which as per the fund manager's belief are sound, but which are mispriced. The fund manager does this by analyzing a company's business model and financial parameters, valuations and business expectations.
What is your approach to managing the fixed income portfolio of this fund?
For the debt portion, the scheme follows a flexible investment approach and invests across corporate bonds, NCDs, G-secs and money market instruments. The fund manager takes an active view of the interest rate movement supported by quantitative research, to include various parameters of the Indian economy, as well as developments in global markets. Investment views/decisions are taken after credit analysis of individual exposures and analysis of macroeconomic factors to estimate the direction of interest rates and level of liquidity. Capital appreciation opportunities could be explored by extending credit and duration exposure.
How often do you re-balance your debt and equity allocation ?
L&T India Prudence Fund's mandated asset allocation is to invest a minimum of 65%-75% of its net assets in equities and 25%-35% in debt and money market instruments. The scheme looks to maintain a steady asset allocation between equity and debt component within the above mentioned range and rebalances whenever the asset allocation is outside the range allowed.
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