When you own a racehorse, why trot. By the same logic, in a growing economy like India, it makes sense to invest in growth-oriented businesses, like Mirae Asset’s Neelesh Surana does. He identifies opportunities in the most unlikely of spaces, including in mid and small-cap companies, without compromising on his exhaustive checklist. The Union Budget’s poor show in stimulating demand does not worry him because Surana believes it is just one of the factors and that the consumption slump will soon end.
He ranks at the top, both in the 10- and five-year Outlook Business-Value Research Best Fund Manager Ranking, with compounded return of 17.39% and 14.37%, respectively. In an exclusive interview with Outlook Business, he shares his secret behind generating alpha
Describe your investment strategy.
At Mirae Asset, our investment philosophy is centred on buying quality businesses at a reasonable price. We have a well-diversified portfolio with holdings across sectors. When it comes to stocks, we look at three things — the business, the management and a stock’s valuation. With regards to businesses, the approach is to identify a growth-oriented one. Since India is a growing market, ideally, a business should grow in double digits or twice that of real GDP growth in the country. Then, besides assessing basic hygiene in terms of governance, we also try to understand the perspective of the leadership. We believe the management of a company has a large role to play in wealth creation. The third filter is valuation — the value has to be bigger than the price so that there is ample margin of safety.
Does this strategy differ when it comes to buying small and mid-caps?
The framework of stock-selection does not change regardless of the market capitalisation. The only difference is that expectation is higher for mid and small-caps. They should have higher g