We aren't married to any one style

Edelweiss Financial has succeeded in making a splash with its differentiated schemes. Anil Sarin, an investment manager with a long stint in fund management, venture capital and hedge funds, has recently joined the group as CIO - Equity. He deep dives into how the fund house picks stocks. What differentiates Edelweiss AMC from the other fund houses? Edelweiss Financial has many different businesses in India - broking, investment banking, distressed credit, asset management and portfolio management services (PMS). What we are trying to do at the Global Asset Management division is to increase the interface between these different groups to form a more holistic view of the opportunities that are available. Secondly, Edelweiss has historically been very strong in quantitatively driven trading. However, the fundamentals side had got less attention over the years. Now we are trying to meld these two styles to give a better product to our investors. We think our quantitative approach can really differentiate us from the rest. How do those quantitative skills help in improving your funds? We have found that the use of quantitative parameters in investing really helps in a down-cycle. We have experienced this over time. Our Absolute Returns Fund, for instance, may not rise as much as the market in a bull phase, but it will also contain the quantum of fall in a correction much better than other funds. Over the long term, this leads to a better return. In other funds such as Emerging Leaders Fund, we are using quantitative approaches to identify stocks. In the large-cap space, the leaders are well identified. Everyone knows what firms are the leaders in banking or autos. So in large caps, a fund can only differentiate itself through sector allocations and sector rotation - knowing what sectors will outperform in the future and allocating funds to them. But in mid and small caps, the choice is enormous. By using quantitative techniques, the job of identifying stocks becomes much easier. Of course current financials are not everything; there will be turnarounds, mergers, acquisitions. But by using quantitative screeners you can screen much faster the stocks which you would like