Cruising in times of volatility

The Indian market has turned volatile of late under the impact of global factors. All the major global markets have seen a correction in recent times. An increasing number of covid cases and a spike in US treasury bond yields have added to the volatility. India has not been an exception to this.

Coming out of a long down cycle:

The recent churn in global macros has not deterred us at Teji Mandi from having a bullish outlook on India. The budget has set up a strong foundation for growth in decades to come. The government has put an extensive focus on infrastructure. Setting up a Development Finance Institute is the right step in this regard.

The government has also focused on making India a manufacturing hub. It aims to replace China as the world’s factory in times to come. It has announced PLI schemes for as many as 10 sectors to encourage them to manufacture for the world.

Apart from that, the growing thrust on privatization and setting up a bad bank to tackle the NPA crisis are the long-term enablers for the economy. With this, India is now coming out of the long down cycle of the last 3-4 years. Several agencies have expressed similar opinions with India’s GDP growth estimated at 12-14% for FY22.

What’s in it for investors?

Historically crashes have provided an ideal time to buy and this time it is no different. As for investors, it is more important to spend time in the market rather than trying to time it.

 India is at the cusp of an upcycle which could last up to a decade. It offers an ideal opportunity for investors to stay put in their investments.

Our strategy to cruise through volatility

We currently follow two different investment strategies that help our investors cruise through the market volatility.

1) ‘Focused Picking’ and ‘Disciplined Rebalancing’ Approach

Teji Mandi Flagship is a multipcap portfolio, our investment strategy has two components – ‘Focused picking’ & ‘Disciplined rebalancing’. Under focused picking we have tactical bets (30-40% of portfolio) where we pick companies which are relevant from 3-6 months perspective. We focus on companies that are gaining market share, are on the favorable side of government policies or beneficiaries of the sectoral tailwind.

We also look out for long-term winners ( 70-60% of portfolio) with a proven track record and strong growth triggers for the future. Under this category, we prefer companies with high return ratios: RoEs upward of 15% and still improving.

Under Disciplined rebalancing, we have a well articulated selling strategy, where we prune and optimize the portfolio from time to time which helps us cruise through the volatility

2) High Risk – High Growth Approach

This is a high risk- high growth portfolio with a long-term investment horizon. The Multiplier portfolio invests in small-mid cap companies that have a high growth runway ahead of them.

It is an ideal time to invest in this portfolio as the business cycle is picking up in India. Small-midcaps have underperformed for over three years and their future outlook is looking bright. High standards of corporate governance is a must for companies to make into this portfolio.

With a longer investment horizon & actively managed portfolio, we help our investors cruise through market volatility.