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Bandhan Core Equity Fund has posted a strong top decile performance in the large & midcap fund category, joining many other equity funds from the fund house that have seen a sharp upturn in performance after Manish assumed leadership of the equity franchise.
Themes/sectors that contributed to alpha include energy transition / power capex, auto – 2 wheelers, select pharma stocks and real estate.
Manish attributes the improved performance across funds to the DAM (Dynamic – Anti-fragile – Macro) philosophy that the fund house has embraced. DAM is an overlay on bottom up stock picking and is aimed at keeping portfolios dynamic, robust in the face of uncertain events and macro-sensitive.
Dynamic - Buy-and-hold is less favoured; buy-and-sell-above-fair-value is preferred (even if fair value is achieved in a short period).
Anti-fragile – portfolios are constructed in a manner that they are not overly exposed to any single factor – whether it is interest rates or currency or oil prices etc.
Macro-sensitive is an overlay that considers top-down view from global and domestic macros which is becoming increasingly relevant in an inter-connected and uncertain world.
Rather than taking a position on global macros, Manish prefers to draw up scenarios and assign probabilities – which then helps in understanding risk-return trade-offs much better. He has 3 scenarios for the year ahead, with 60%, 30% and 10% probabilities assigned to each.
Good discussion on macro strategies & the DAM process. Bandhan is indeed bouncing back. The discussion helps one to be prepared in different scenarios.
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