In this series, Investment Week speaks to some of the winners of the Fund Manager of the Year Awards 2020 about their teams, how they construct portfolios, performance drivers and how their particular strategies may develop in the future.
What has helped drive performance for the fund in recent years?
We believe winning businesses have common traits and are always on the lookout for ones that have high entry barriers, are under-penetrated while benefitting from rising income levels.
We back strong management teams who have thought leadership and are category disruptors with an unwavering commitment to all their stakeholders.
Performance in recent years was mainly driven by leading private sector banks, a play on greater financial inclusion in a fast growing economy.
Exposure to life insurance companies, a learning from our pan-Asian experience while the sector was still in the nascent stage in India and undiscovered by local investors, also contributed to the fund performance.
Last but not least, our stock selection in healthcare services and under-penetrated companies in consumer durables, as well as emerging leaders in upcoming segments of digitisation, contributed handsomely to portfolio returns in the past three years.
How are you tackling the challenges facing investors in the current climate as a result of the fallout from the Covid-19 crisis?
Indian markets today are a classic story of excessive exuberance following Prime Minister Narendra Modi's election victory in 2014, giving way to almost utter pessimism as the country battles with the coronavirus crisis.
History has shown the extremes - excessive optimism and pessimism - are good contrarian indicators in India from a stock return perspective.
The biggest challenge facing investors in the current post-coronavirus environment is being able to see through to the long-term. It is pivotal to steer away from herd-mentality, where investors tend to falter to market sentiment rather than assessing investments based on underlying fundamentals.
With historic low interest rates, little economic excesses and rock bottom GDP growth rates, we believe there will be a significant uptick in Indian GDP growth rates and investor sentiment in the coming years and could stand for a significant alpha generator for the portfolio.
