ICICI Prudential Flexicap Fund completes 5 years with a distinguished track record of top quartile ranking across 1 yr, 3 yr and 5 yr time horizons.
Rajat spells out 3 key factors that are driving this outperformance:
1. Keen focus on identifying not just market share gainers, but profitable market share gainers
2. When you find them, back your convictions with appropriately strong position sizing
3. Ride through the cycle with your winners to harness their true wealth creation potential
The top 2 stocks in his portfolio are a 2 wheeler and a passenger car maker – unusual to say the least in a peer group that usually allocates these positions to large banks. Both are good examples of his relentless focus on bottom up picks coupled with conviction based position sizing.
2 wheelers and cars continue to display strong business momentum, belying the fears of demand fizzling out after an initial GST cut driven demand spurt.
Rajat likes large banks and is in fact overweight that segment, though underweight on financials overall.
While many fund managers are expressing concerns about demand growth slowing down in discretionary consumption segment, Rajat prefers to remain bottom up focused and continues to hold profitable market share gainers in several niches including fashion accessories, footwear, clothing, quick commerce and airport QSR.
A recent and rare top down play was moving from underweight to neutral on IT services. Valuations are now attractive, recent earnings numbers are suggesting that they are still able to keep head above water despite the massive disruption in business models.
Among smaller niche sectors, he continues to like cooling services, engineering exporters and cables and wires players.