 "Smart Portfolios 6: Fund Managers bet big on mid-and small-caps")
Business Standard started Smart Portfolios four years ago as an educational initiative for our readers. Smart Portfolios is a year-long exercise where professional investors run phantom portfolios of Rs 10-lakh each.
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Our readers too can participate in Smart Portfolios by creating their ghost portfolios. They can enjoy the benefit of learning how to manage portfolios by keeping tabs on the fund managers' movements.
Of the six fund managers that constitute this season’s challenge, three fund managers – Vinay Khattar, head of research for retail capital markets at Edelweiss Financial Services; Sunil Jain, head of equity research (Retail) at Nirmal Bang and Ankit Agarwal, vice president and fund manager at Centrum – invested in stocks from the mid-and small-cap sectors. And, the strategy has paid off well. Their investment, in some cases, has managed to beat the rise seen in the mid-cap and small-cap indices during May 2014.
Some of the buys of Vinay Khattar include Atul Ltd, Brigade Enterprises, BASF, Zee Entertainment and Escorts. His returns range between –6.6% and 52%.
With gains ranging between –4.5 and 31%, Sunil Jain’s top buys include Aban Offshore, Mangalam Cement and Aegis Logistics. Ankit Agarwal’s pick Techno Housing & Engineering, on the other hand, surged nearly 34% post his purchase.
“Since the start of the season, my portfolio has been heavily tilted towards the mid-caps. However, it’s not a tactical shift from the large-caps, as I feel there are still pockets of value in that basket. My approach is stock specific. Wherever I find value with probable good returns, those are the stocks I invest in,” said Sunil Jain of Nirmal Bang.
“Recently, I added Dishman Pharma to my portfolio, even though pharma is not the most favoured space now. The stock has value that can get unlocked over a period of time. And this is the case with many of the stocks in the broader markets. I continue to remain bullish on the names that are a part of my portfolio,” he adds.
He feels that individual stock out-performance will continue rather than themes playing out going ahead and there are stocks in the mid-and small-cap space one can buy even at the current levels.
Ankit Jain, on the other hand, suggests that there is some tactical shift in the investment strategy as whenever there is recovery in markets and the mid and small-cap segments tend to outperform. At the time when we added the broader market names in the portfolio, there was lot of value in those names.
“I am of the view that upside in large-caps would be capped around the current levels. However, one might see higher levels in the broader markets going ahead. Hence, I will continue to stay invested in the current names I have in my portfolio,” Agarwal says.