ETMarkets Fund Manager Talk: This money manager picks stocks based on Re-VIEW Strategy

“We follow an active management style whereby we take action on the stocks based on Re-VIEW Strategy,” says Mayur Shah - PMS Fund Manager at Anand Rathi Advisors Ltd.

In an interview with ETMarkets, Shah, said: “Banking and financials, capital goods, defence, cement, logistics, auto, and some selective speciality chemicals are sectors we are bullish on” Edited excerpts:

Markets are about to make history probably in November. How has your fund grown as markets probably touch October 2021 highs?
I have been actively managing the Discretionary PMS Investment approach. All three strategies are doing well compared to broader markets.

One of the new strategies launched a year back has been able to generate decent alpha despite last year of a challenging environment.

How much AUM you manage? Has the fund AUM grown in 2022?
Current AUM of Discretionary PMS stands at approximately 330 cr. AUM has grown by 28% in 2022 as on October 2022.

What has been your portfolio strategy amid the volatility seen in the past 1 year?
Since the launch of the funds we follow an active fund management style. Over the last 1 year given the level of volatility, the focus clearly was to manage the downside risk by moving out from companies and sectors whose earnings and margins are impacted and inability to pass on inflation to end consumers.

Staying connected and increasing weightage in company with better bargaining power.

Which sectors are you currently bullish on?
Banking and financials, capital goods, defence, cement, logistics, auto, some selective speciality chemicals

Q) Any new stocks which you added or sold off amid the rally we have seen from the June lows?

A) We have added Bajaj Finance, Bajaj Finerve, Eicher Motor, and Escorts Kubota.

As SIP cross Rs 13000 cr per month – what does it tell you about the retail investor behaviour? Can we say that they have come of age?
Retail investors are becoming more and more mature. Thanks to reforms in communication technology and social media. Also, the regulators are constantly ensuring the retail investors' safety is taken care.

With information, advisory and trade execution just a click away new generation (young population) are adapting to the Investment plan at an early stage.

What is your take on the new-age tech companies? Are you comfortable adding them to the portfolio?
New-age tech companies are definitely good for the economy as a whole although it disrupts the old economy but bring in lot of efficiency and accessibility of products and services at lower cost thereby improving the standard of living.

However, not all tech companies emerge as winners. Only a few of the companies we are participating in and under our watch list are generating positive cash flow with good ROE.

How does your fund manage risk?
Prima facie the strategy itself is well laid out with specific inclusion and restrictions.

Also, we follow an active management style whereby we take action on the stocks based on the Re-VIEW Strategy.

V- Valuation Check – Higher Valuation can lead to price-wise or time-wise correction giving an opportunity to shift.

I – Impact of event whereby earnings are likely to get impacted, need to shift.

E – Earning Visibility check, cutting down the losses where earnings not meeting expectations for consecutive quarters.

W – Weightage Check, booking partial profits to keep individual stock allocation in check and maintain diversification.

If someone plans to put in say Rs 10 lakh now do they follow a staggered approach or a lump sum approach as markets are on verge of hitting highs?
Staggered investment approach always gives mental peace till the time you don’t get into the FOMO (Fear Of Missing Out) trap.

Looking at the market which has already seen more of a time-wise correction rather than price correction, the probability of making money in the medium to long term is increasing based on historical rolling returns over 3-year whereby 1 year has already gone flat.

What is the kind of cash level you are sitting on – to be deployed on dips?
We are almost fully invested in the market in our portfolio. We keep getting inflows at different time intervals from multiple clients. We believe the client has already done his asset allocation into debt and equity.

Further, we are timing, on the investment might disturb the asset allocation of the client. We rather make changes in the strategy by changing allocation between defensive and aggressive sectors.

A little about yourself and how you started your equity journey?
Have done my post graduation MBA(Finance) and also CFP. Have been part of the financial market for over 17 years now. Started my career with Kotak Securities in 2005 as an equity advisor.

From 2007 working with Anand Rathi Group in different roles into wealth management products, private client group advisory and currently over the last 11 years into portfolio management.

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