The equity investment management activity is process-driven. The investment philosophy is designed to seek consistent, long-term results by adopting a research-based, methodical approach to investing. The investment process is driven by in-depth fundamental research. The research process which includes regular interactions with companies and secondary research in the form of meeting with analysts and industry experts is recorded and documented.
Do you think the momentum in the market will continue going ahead? What could derail it?
Expectation of better earnings growth in the coming quarters combined with strong macro data and inflows could maintain the current market momentum in the near term. US interest rates, Chinese currency devaluation, global bond yields and European banking stress may continue to act as the near term risks for equities.
Which sectors do you think will play out well in the next three to five years?
We believe sectors like financials, consumer discretionary & health care could play out well in the next 3-5 years.
What is your reading about the current state of the Indian economy?
We believe the macro situation in India has improved significantly over the past 2-3 years. This could be attributed to improvement in current account deficit, fiscal deficit, inflation and a stable currency. The government has been able to use the savings from lower crude oil subsidies to fund productive capital expenditure. Good monsoons after two bad years and government’s push for key reforms should eventually lead to higher GDP growth.
What global cues are you looking out for?
We would look out for key global cues like the USA election outcome, USA interest rate, China currency, global bond yields and the state of EU banks.
DSP BlackRock Opportunities Fund has a commendable track record. What worked in its favour?
We have followed an open style orientation in the identification of investment ideas rather than focusing on any one individual style. Stock specific approach rather than a sector focus approach has worked well for the fund. Also, high conviction bets have been backed by higher proportion holding in the fund. We have also been agile during a sell down of a position – this could be profit booking or change in stock view.
What has contributed to the stellar performance of DSP BlackRock Tax Saver Fund?
Like the DSPBR Opportunities Fund, stock selection and open style orientation has helped the Tax Saver fund.
How do you plan to sustain the performance of both these funds in future?
It is difficult to talk about how the future would be. The endeavour from our side would be to put in our best efforts and continue to follow our investment processes and philosophy.
What risk mitigation strategies have you deployed in both these funds?
Portfolio risk factor exposures are moderated using historical experiences as a guideline. Adequate steps are taken to ensure liquidity at position/strategy and overall portfolio levels. Risks arising from underweight positions are actively monitored.
In your career as a fund manager, what have been your greatest learning’s?
I think the key learning over the years for me have been to focus on core investment arguments for a stock and keep away from the noise. Also, one should not get emotionally involved with stocks.
