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Swimming Against The Current
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Lahiri follows a rather unique philosophy when it comes to the eight equity funds that hemanages: be a silent worker, but let your work speak for itself. And speak it does.
Of the 34 tax-saving funds that are available in the market today, many of which gave negative returns, Lahiri's funds managed to show positive returns in the previous year. The fund which has a three year lock in period has outperformed its benchmark index (BSE 200) and its peers. BSE index performance was a negative 8.7, and the average for the fund's peers was a negative 5.4, Lahiri's fund managed 0.9 per cent. The fund gave a 3-year return of 33.74 per cent. Lahiri says the performance of the fund is the result of hard work, a defensive portfolio and good luck.
Global uncertainties in the previous year, sticky and elevated levels of inflation, combined with a lack of policy initiatives meant a tough environment for Lahiri's peers to handle. And these were good enough reasons for him to pick up stocks that he thought could go against the tide. So, he went overweight on FMCG and pharma stocks, along with a good mix of cement, energy and telecom.
At any given point in time, Lahiri likes to keep 45 stocks in his fund's portfolio. Last year's sector details throw light on Lahiri's investment strategy: heavier weightage to ‘defensive' stocks in his fund as compared to their weightage on the Nifty. Take for example FMCG. A sector he feels has stable companies, operations that are run efficiently, and without huge fluctuation in numbers. While Nifty has an FMCG weightage of 9.22 per cent, the fund's exposure to the sector was 10.66 per cent. Similarly, for construction and healthcare: while construction had a weightage on the Nifty of 1.99 per cent, it was 9.24 per cent in the fund; healthcare was 3.91 on the Nifty and 6.28 per cent in the fund.
Luckily for Lahiri, he was beginning to cut his weightage in telecom around the time the sector started showing red signals. A tight policy environment last year also meant that he stayed away from banking and financial companies, materials (steel, ferrous and non-ferrous), auto and capital goods. With a drop in the order books across these sectors and the drop in GDP growth rate, it was safe to stay away from them, says Lahiri.
Business, management, and valuation are at the core of Lahiri's investment mantra. Buy good companies, run by an able management and at reasonable valuations. With this recipe, Lahiri intends to remain at the top of the game.
(This story was published in Businessworld Issue Dated 30-04-2012)