"We run multiple philosophies and would want the market to rate us on those philosophies and not categories,” states R Srinivasan, head of equity at SBI Mutual Fund, who manages Rs.8,000 crore of AUM across five schemes. It’s not without reason that — ‘Vasan’, what his colleagues call him — has seen both adulation and infamy.
In mid-2009 when Srinivasan moved from Everstone Capital to SBI Mutual Fund as a senior fund manager and was assigned the Magnum Emerging Businesses Fund, it was ranked 41 among the 47 funds in the mid- and small-cap category after a massive 69% fall in 2008. But in the same year when the fund bounced back with a 109% return and over the next three years ended up as the top fund in the mid-cap category with an impressive 56% return in 2012, Srinivasan made headlines in every pink paper. However, following a below average performance with a negative return of over 7% in 2013 and since then, based on the past three-year returns of 12%, the Rs.1,600-crore fund is now at number 63 among the 68 funds in its category, as per Value Research.
“That is because the fund is an absolute return product and that could lead you to periods where you could underperform the benchmark,” explains Srinivasan, who is 8th as per the Outlook Business-Value Research five-year rankings. The other fund that he runs is the Rs.2,470-crore Global Equity Fund which focuses only on quality stocks and is a relative return product. “Companies in this fund won’t face existential issues. They will not suffer if the market falls sharply, but they will not rise either, if the market goes up sharply. Over time, it will fetch you good returns,” assures Srinivasan. He adds how the focus is on stocks with regard to this fund.
The fund house runs two philosophies: large cap (relative return) and mid cap (absolute return). The relative return is based on four factors — sales growth, ebitda margins, volume, and market share changes. “In large caps it is very difficult to have expectations any different from the sell-side which have an in-depth coverage of large caps,” says Srinivasan. As for mid caps, the key factors that the fund manager focuses on are — core competency, competitive advantage in business, m