'Volatility is a friend'

When you said 'emerging businesses', what kind of businesses were you interested in? Which ones would you avoid? The name 'emerging businesses' has a legacy issue. The fund has been run as a concentrated-conviction multi-cap portfolio, which now comes under the focused-fund category of the new SEBI classification. Accordingly, the name has been changed to SBI Focused Equity Fund. So that's the reason why you have a concentrated portfolio of 27 stocks? Yes, it's by design. By the way, 27 is not concentrated. There is enough evidence out there that proves that diversification benefits peter down significantly beyond 20 stocks. What has resulted in the outperformance by this fund in the last one year? The top five performance contributors for the last one year were Divi's Labs, Gruh Finance, P&G H

This article was originally published on June 26, 2018.