Disciplined and diversified | Value Research Soumendranath Lahiri, co-fund manager, L&T India Prudence Fund, answers our questions on the balanced fund
Fund Manager's View

Disciplined and diversified

Soumendranath Lahiri, co-fund manager, L&T India Prudence Fund, answers our questions on the balanced fund

What is your asset allocation policy / strategy?
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

What is your approach to managing the equity portfolio of this fund?
The fund maintains a well diversified equity portfolio spread across sectors and securities. The fund looks for opportunities across the market spectrum and currently has approximately 50% of its equity component invested in large cap stocks. The scheme does not have any bias towards any particular market segment and allocations are driven by bottom-up stock picking involving rigorous research and fundamental analysis. The fund follows a disciplined investment approach with focus on (1) owning fundamentally strong businesses - scalable, profitable businesses with strong balance sheet to support future growth and (2) owning them at appropriate valuation

What is your approach to managing the fixed income portfolio of this fund?
L&T India Prudence Fund for its fixed income portion of the fund maintains its focus on having a relatively high credit quality portfolio along with a stable duration positioning driven by medium term market outlook, as the objective is to add stability to the overall portfolio and control volatility in the overall performance. The fund follows a flexible approach in terms of allocation and invests across corporate bonds, G-secs and money market instruments. The fund manager analyses a host of factors including trajectory of inflation, interest rate movement, growth among others various parameters of the Indian economy, as well as developments in global markets to arrive at his long term view of the debt markets.

How often do you re-balance your debt and equity allocation?
The scheme looks to maintain a steady asset allocation between equity and debt component within the above mentioned range of 65-75% and rebalances the portfolio whenever equity allocation approaches the lower or the upper band.


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