Headline indices might double in the next 3 years: Vinit Sambre
Fri, Oct 31, 2014
Source : Jeni Shukla, Citrus Interactive

Vinit Sambre is a Fund Manager focusing on sectors like Pharmaceuticals, Power Utilities, Chemicals, Fertilizers and Textiles. He is the Co-Fund Manager for DSP Blackrock Micro Cap Fund since June 2010. He also manages DSP BlackRock Technology.com Fund. He  co-manages DSP BlackRock Small & Midcap Fund and DSP BlackRock MIP Fund.

In an exclusive interaction with Citrus Interactive he talks about his funds and the market.


The DSPBR Micro Cap Fund has beaten the BSE Small cap index comprehensively in the last 1 year. Also it has performed well in the last 5 years. What has led to the outperformance?

We follow a bottom up approach in terms of stock selection. The focus is on companies with a strong financial track record, dividend payment history, among others. Some companies in pharmaceutical, agrochemicals and specialty chemicals industries have contributed to the outperformance. Some names in the media and IT also pulled up the performance. Right stock selection has helped. Within a particular sector there can be a huge difference in the performance of two companies – so identifying the right stock is critical.


What is your view on the IT sector?

Most of the companies in the IT space are seeing business coming in. The US and European markets are contributing to this. Currently there is no pressure on pricing. We are following a neutral strategy. We are expecting these companies to grow by 12-15%. Companies focusing on new areas like SMAC (Social, Mobile, Analytics, Cloud), Big Data and Cloud Computing will see higher growth.


What is the management philosophy and style for DSPBR Micro Cap fund?

The stock selection style is bottom up. We define the top 100 companies by market capitalisation as large cap; between 100 and 200 as mid cap; between 200 and 300 as small cap and beyond 300 as Micro-cap. The fund is mandated to have at least 65% exposure to the micro cap category. Due to the inherent risk involved in small /micro caps, it is essential to carry out detailed research on the company before investing in it. Our recommendation to investors is to invest in the fund with a minimum 3 years horizon.

Does the DSPBR Technology.com Fund have a market cap mandate? Does it have mandates as far as sub-sectors are concerned?

The fund has no market cap restriction. We focus on IT, media and telecom sectors. Individual stock concentration should not exceed 10%. If that stock in the benchmark is above 10% then we can go to the extent of concentration of that stock in the benchmark.


Do you think we have reached the peak of the market cycle?

We are not expensive at this point. We have witnessed a huge run up in the market in the last 6 months. So the market has to go through a bit of a time correction. Reforms will lead to more upside. We are not expecting any major downside. We will wait for fresh triggers. DSP BlackRock view on the headline indices is that it may double in the next 3 years.


What is your outlook on the Small Cap segment?

Experience suggests that in a bull market small and midcap tends to outperform large caps. Since we are bullish on the market we believe that the segment has the potential to outperform large caps. However, one has to understand the risks in the segment and invest according to one’s risk appetite.


Which sectors are you bullish/bearish on?

We are currently bullish on Consumer discretionary, materials, healthcare and financials. We are underweight Utilities and Consumer staples. Consumer staples appear too expensive. Utilities will take time to perform.


At the current levels, do you recommend retail investors to invest via SIPs or lump sum?

The best way for the retail investor is to go via the SIP route. One should not try to time the market. I recommend investors to have a higher equity allocation in the next 3-4 years – anywhere between 20 to 60% based on their risk appetite.



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