'We follow a buy & hold strategy'

FUND MONITOR: Anup Maheshwari, DSP Merrill Lynch Equity Fund

What is the fund's investment strategy?

We follow a long-term buy & hold strategy. That way, our portfolio turnover is pretty low.

Basically, we follow a bottom up approach where we look at valuations, RoE and the company's scalability as important factors. We pick stocks looking at their medium to long-term potential.

The fund has increased its allocation to mid and small-caps. What is the rationale behind this?

As said earlier, the fund follow a bottom-up approach to stock selection. The increase in exposure to mid and small "� cap segment is not a new trend.

Our definition of large caps as the top 100 companies by market capitalization. The next 100 is classified as mid-caps and the rest as small-caps. We tend to park 50 per cent of our funds in large "�caps and the rest in mid and small cap stocks.

We find companies in the mid and small-cap segment attractive, because of their scalability and potential for growth.

We believe that risk involved in investing in mid and small-cap counters depends on how well one has researched the company.

What is the outlook on equities going forward?

We continue to be bullish on equities on a longer-term (more than one-year) perspective. Even though earnings growth is slowing down, it is still attractive and we expect it to be around 18 per cent going forward.

Keeping that in mind, equity markets should be able to give a return of 15 per cent in the next year. Markets could witness volatility in the short-term.