We have a lot of conviction in small & mid caps, says Vaiibhavv Chugh of Abakkus Mutual Fund

After receiving final approval from the Securities and Exchange Board of India (SEBI) in August last year, Abakkus Mutual Fund began its investment journey a few months ago. With only two schemes currently in its bouquet of offerings (flexi cap and liquid fund), it has already crossed ₹3,000 crore in assets under management (AUM).

We spoke to Abakkus Mutual Fund's CEO Vaiibhavv Chugh about their investing philosophy, expectations from the small and mid caps in 2026, why they believe in placing contrarian bets, and much more.

Edited Excerpts

Why did the fund house start its investing journey with these two schemes: a flexi-cap fund and a liquid fund?

Many investors prefer to park their money in liquid funds before transferring it to equity schemes via STP (systematic transfer plan). Another popular category among retail investors is a flexi cap fund, which offers flexibility to invest in stocks across the market spectrum. That's why we started with these two.

What is so unique about Abakkus that investors should consider investing in their schemes?

Our funds cover a large spectrum of stocks. We are the bottom-up stock pickers and find good stocks on merit. We are quite aligned with our investing philosophy.

Additionally, we have a good team of 25 people in research and investment. We have fund managers with an average experience of 18-20 years, whereas research analysts have an average experience of 7-8 years.

What is so different about your investing philosophy?

We focus more on active weight -- between 62-63%. And we have a greater tilt towards mid- and small-cap stocks, as we have higher conviction in them. We tend to track a large number of stocks. We actively look for unique names in mid- and small-caps.

In 2026, which category of funds should retail investors explore -- large-cap, mid-cap, small-cap or benchmark index?

A combination of large-cap and small-cap stocks will deliver good returns. Meanwhile, we find small caps quite attractive. Expectations for earnings growth of small-cap stocks hover around 22% (according to a recent report), whereas for large caps, it is 14 to 15%.

The AMFI data for Jan 2026 was released recently, showing that inflows into equity funds fell by 14%. What are your views on the mutual fund industry and investors’ investing behaviour in view of this?

We are very positive about mutual fund investing. Currently, only 3% to 4% of our population invests in mutual funds (5.9 crore unique investors exist in Dec 2025), while most Indians are still not a part of it. Jagrukta (awareness) for mutual funds is still growing.

About the January data—we knew these numbers would be moderate only. Investors lacked clarity on many things. But now (after the India-US trade deal was announced), ambiguity is behind us. Investors will again view Indian markets positively, and I believe FIIs will also return.

Can you explain how a fund or an investor creates wealth by being contrarian, one of Abakkus' investing philosophies?

By contrarian, we mean that we will buy a stock even if it is not fashionable to buy it. And we would not be in a hurry to sell it, even if two quarters are not good for that stock, so long as there are no fundamental issues. So, we are more fundamentals-driven. We invest based on our conviction, even if we are the only investor in that stock -- this falls under the contrarian view.

What advice would you give to the youngsters who are yet to start investing?

I recommend that they first understand themselves: how much risk appetite do they have, and for how long do they want to invest, etc.

And first of all, they should start with index investing. Gradually, they can upgrade to active funds. They should also start understanding portfolio construction. They should avoid the news which keeps floating around and not get bogged down by what others have been doing or saying on social media. They should simply invest for the long term.

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This article was taken from MintMoney and can be accessed here