HDFC Balanced Advantage Fund marks its 30thanniversary with a huge performance, topping the BAF league table with a 14% alpha over peer group average over the last 1 year.
Gopal caught the domestic cyclicals rally early – across power, defence, railways, PSUs and capital goods – which have substantially driven fund outperformance in CY23.
He believes domestic cyclicals will continue to outperform, though one has to be mindful of valuation excesses in some pockets. He is nimbly booking profits where valuations are going above his comfort zone and switching to relatively lower valuation plays in the same theme.
Experience has taught Gopal that while staying with the leaders pays in bear markets, investing in laggards can be a rewarding experience in bull markets. He is using this learning judiciously to navigate this bull market.
As valuations in his favoured domestic cyclical plays continue rising, he is looking at booking profits and switching into select pharma and IT stocks. His aim is to maintain top quartile performance in this fund, as it traverses through market cycles.