Baroda BNPP MF has launched its Innovation Fund at a time when we are witnessing a tech and AI driven innovation wave that’s profoundly changing the way we live and the way businesses are conducted.
In-house attribution analysis reveals that companies that embrace innovation are outperforming those that aren’t. Innovation has a proven alpha edge, which this fund seeks to harness.
The fund will invest across 3 broad themes: (1) digital natives including green energy (2) transformers/enablers of innovation and (3)legacy companies adopting technology/revamping processes.
The fund will likely be overweight IT, auto, engineering and underweight financials, materials, real estate – all decisions coming from extent of innovation in their business models.
Sanjay is not very worried about markets as he argues that markets are not expensive relative to earnings growth prospects. So long as you invest in strong earnings growth businesses at reasonable valuations, you don’t need to worry about bubbles that may pop up from time to time in different pockets of the market.
Geo-political situation in Middle East bears close tracking– significant escalations can not only impact oil prices but also freight costs and delivery timelines, creating avoidable supply bottlenecks.