Student-run fund chases good deals

Student-run fund chases good deals

New Delhi: On the day the benchmark index of the Bombay Stock Exchange, or BSE, dropped 800 points, Samyak Jasani seemed remarkably calm for a mutual fund manager. He made some calls and met his two investment coordinators to discuss the markets.

Which wasn’t hard, considering they all live in the same hostel.

Jasani, a second-year MBA student at the Management Development Institute, or MDI, in Gurgaon, is the coordinator of Unnati, the oldest student-run mutual fund in the country. And at a time when stock markets are crashing, calmer heads seem to be prevailing at MDI.

“Right now, there’s a lot of stuff out there that is falling irrationally," Jasani says, in very unmutual-fund language. “So there’s a lot of stuff that is extremely attractive, stuff that we can pick up."

Unnati doesn’t buy often—the number of times each year, Jasani says, is in the single digits—but current prices have proved too tempting. “We’ve entered into a few trades," he admits.

Started in 2001 as a student club, Unnati manages a corpus worth roughly Rs5 lakh, on behalf of around 350 investors, all students and faculty. The fund tracks 20 sectors, and offers a diversified and a mid-cap product.

The club’s 30 student members are all responsible for research, but Jasani and his investment coordinators take the final trade decisions.

Unnati opens itself up to subscriptions for a week every year, which—in an uncanny coincidence—happened to be last week, during one of the stock market’s worst phases.

“Last year, we had a cap of Rs30,000 per investor," says Saurabh Mundra, one of Unnati’s two investment coordinators. “This year, we’re quite bullish. We’ve raised the cap to Rs50,000."

Mundra researches companies almost every night, and Unnati meets weekly between 11pm and 2am to talk strategy. During the day, in between classes, Mundra and his fellow coordinator conduct trades. They talk about stocks all the time anyway, he says, so there hasn’t been any need to call extraordinary meetings.

“Next week, we’ll probably buy into FMCG (fast moving consumer goods) or shipping, companies with good business models that have gone below their intrinsic values," Mundra says. “We take no short-term bets."

Jasani backs that up. “No day trading. Our holding period is between one and three years, and sometimes even more. We bought into Reliance Industries Ltd at Rs300, you know," he says. And they haven’t sold it since. The scrip was worth Rs1,527 at close on 10 October at BSE.