In a year, when Sensex returned 80%, most mid-cap funds doubled investors’ money. Birla Mid Cap A Growth, managed by Sanjay Chawla, came on top and got Morningstar India Small/Mid Cap award. Mahesh Patil, co-head (equity), Birla Sun Life Asset Management Co. Ltd shares what worked for the fund. Edited excerpts:
What helped you emerge on top?
We invest only in fundamentally good companies, having excellent management, with reasonable valuations. These three principles have been our guiding force. Of course, this is backed by solid research with “ear to the ground” approach. This helps us spot potential winners. Strong research inputs are blended with the rich experience of fund managers.
Spotting opportunities: Birla Sun Life AMC’s Mahesh Patil. Shriya Patil Shinde / Mint
Decisions that helped you?
Last year was exceptional. Most stocks were trading at a significant discount to their intrinsic value. We picked companies that were fundamentally sound but were hammered down due to global uncertainly. During the early part of the year, broad sector allocation worked well. Post-elections, stock-specific calls helped.
How did you handle the period between January and April 2009?
We revisited the companies we track to reassess the basic assumption of our investments. Our research helped us pick winners.
Also See | Birla Sun Life Mid Cap A Gr (Graphic)
Your fund is larger now. Are you increasing exposure to large caps?
What we say is what we do and what we do is what we say. A mid-cap fund will not deviate from its mandate. We believe the investor has done his risk assessment and has chosen accordingly.
Currently, the size of the fund does not pose a challenge. We believe the corporate India story is in the early stages of growth and offers exciting opportunities in various sectors. Identifying these opportunities early is the key.
You maintain about 40 stocks in your portfolio. Given your increasing corpus, will you add more?
Mid-cap companies have a bit of challenge in terms of liquidity. Entry and exits may have an impact on the price. We would have stocks which we are trying to buy or sell at prices which we believe are reasonable. At times the portfolio would have 50 stocks, but the core portfolio will always have 40-45 stocks.
Graphic by Yogesh Kumar / Mint