In a recent interview with Wealth Forum, Mr Vihang Naik, Fund Manager, L&T Mutual Fund provides insights to his investment strategies for L&T Midcap Fund. He says 70:30 strategy across bull and bear phases has enabled the fund to maintain its outperformance over the years. Edited excerpts:
WF: Your fund has an enviable record of being at the top of the performance league tables across 3, 5 and 7 years, and top quartile over 10 years. What in your view are the key factors that have enabled this consistent outperformance?
Vihang: We have followed our 70:30 strategy across bull and bear phases. 70% of the fund is invested in high quality stocks. 30% of the fund is invested in deep value stocks with a visible catalyst. High quality protects downside and provides compounding. Deep value stocks provide the fund with aggressive returns when value gets priced appropriately.
WF: The fund seems to have run into some near term performance challenges. What’s impacting current performance and what is your strategy to maintain your long term performance track record?
Vihang: We do not have large cap exposure in the fund. We predominantly invest in mid and small caps companies. The SEBI circular allows Midcap funds to invest 35% of the AUM in either large, mid or small cap stocks.
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