Aditya Birla Sun Life Focused Fund Growth INF209K01462

Momentum and sentiment were integral to the investment strategy, and Patil on several occasions used short-term tactical plays to good effect.

Under current lead manager Kunal Sangoi, the broader contours of the fund continue to broadly retain the same facets. For instance, the fund continues to be a large-cap-biased strategy. It will also not deviate too significantly from the benchmark but will be benchmark-aware in terms of sector weights.

That said, Sangoi tries to bring in his own style and framework while managing this fund. The fund has a mix of both growth and value stocks and therefore have a blended style (with a bias toward growth names). The addition of value names in the portfolio that have a certain margin of safety embedded in them should protect the portfolio during volatile periods. Regular oversight by the internal risk committee ensures that the risks are kept at bay.

Although the investment strategy has now stabilized and the portfolio is largely in line with Sangoi’s thought process and investment philosophy, its execution under him is yet to be tested over time. This is Sangoi’s first experience in managing a concentrated strategy, where the execution and stock-picking skills are magnified in terms of risk. Considering his reduced experience in managing such a strategy and the fact that the new framework has not been tested over the long term, we retain the Process Pillar rating at Average for now.

Kunal Sangoi continues to manage this fund with a large-cap bias approach wherein the large-cap names constitute around 80% while the mid- and small-cap names cumulatively account for around 20% of the portfolio.

He constructs the portfolio with a benchmark-aware approach and ensures that it doesn’t deviate too significantly from its benchmark when it comes to sector allocation. However, within the sectors, Sangoi can have underweight/overweight stock positions relative to the sector depending on his stock-picking framework.

Given the regulatory requirement cap of 30 names in the portfolio, Sangoi would typically have around 28–29 names in the portfolio to have some room to maneuver when it comes to adding a new stock and exiting a name at the same time.

The fund strives to remain fully invested at all times, and therefore the cash exposure in the portfolio is maintained around 3%-5%. Tactical bets are restricted to only one or two names in the portfolio and not at a sizable allocation. Typically, the fund would follow a buy-and-hold approach.