Thinking of you as we celebrate a milestone

Interview with P V K Mohan, Head of Equity, Principal MF

WF: Congratulations on the 20x growth in AuM in just 12 months in your Balanced Fund. To what to do you attribute this huge success?

Mohan: The phenomenal growth in the AUM of the Balanced Fund can be attributed to a combination of factors. Favourable market for such Funds, good performance of our Fund and focused sales efforts and support of our partners.

WF: How is the equity component of the fund managed?

Mohan: The equity component is managed as a multi-cap strategy with over 60 % of the equity portfolio comprising large cap stocks. The focus is on identifying stocks with good growth prospects and trading at attractive relative valuations. We are more bottom-up in our portfolio construction and rely significantly on our in-house research. The equity component can range between 65-70%

WF: 2017 was a landmark year when no single month delivered a negative equity market return – a feat that few expect will be repeated, and events in recent weeks seems to reinforce this belief. In what ways, if any, are you preparing the fund for a period of turbulence that may lie ahead of us?

Mohan: It seems that 2018 will be a challenging year and witness greater volatility. The first thing is to revalidate the investment hypothesis of our portfolio stocks and hold on to those where our conviction is high, notwithstanding the fact that they could witness corrections and be more volatile. Since we invest for the long term, the best defence is to ensure strong conviction in the stocks we own. At the margin, new additions have been in the large cap space, especially those we believe have a modest downside and reasonable upside

WF: Monthly dividends from balanced funds are increasingly in the spotlight as there are fears on them being misrepresented as well as fears on unsustainability of these dividends during market corrections. What is your monthly dividend payout yield and to what extent do you as a fund manager believe this is sustainable?

Mohan: The sustainability of the monthly dividends would in large part depend upon market performance and by no means could be construed as a given. To that extent, we have tried to focus on giving steady dividends

Product label

The views expressed and information herein are independent views of the interviewee and for informative purpose only and under no circumstances should be construed as an opinion or Investment advice. The information contained herein is not intended to be an offer to seek solicitation for purchase or sale of any financial product or instrument. Investment involves risk. The investment strategy stated above may change from time to time and shall be in accordance with the investment objective of the fund.

As an investor you are advised to conduct your own verification and consult your own financial and tax advisor before investing. The Sponsor, Trustee, AMC, Mutual Fund, their directors, officers or their employees shall not be liable in any way for any direct, indirect, special, incidental, consequential, punitive or exemplary damages arising out of the information contained herein.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

Share this article