ETMarkets Fund Manager Talk-Avoiding weak sectors consistently can help outperform indices: Agreya Capital

economictimes.indiatimes.com:

MUMBAI — Agreya Capital Advisors believes in creating a portfolio that consists of strong growth sectors/stocks which could help in generating index-beating returns. The portfolio management services provider’s largecap fund has given close to 24% returns over a 1-year period, according to PMS Bazaar data. “We believe that avoiding weak sectors consistently through a process could potentially outperform indices.

We completely avoided the sell-off in the IT sector in FY23, while taking an early call on pharma,” said Arjun Narsipur, fund manager, Co-CIO, at the PMS firm. Edited excerpts:Benchmark indices have rallied close to 16% in 5 months. How comfortable are you with the current valuations?The rally over the last 5 months must be looked at in the overall context that between October 2021 and June 2023, Nifty 50 was largely sideways.

There is no doubt that valuations have gone up, but India has always been an expensive market and given the growth expectations and global capital chasing relatively limited number of high quality deployment opportunities, it is likely to remain so over extended periods of time.If we talk about your PMS funds, your Flexicap and Largecap funds have given stellar returns over a 3-year period, according to PMS Bazaar data. Could you share the stock-selection strategy in these funds?In our large-cap strategy, we try to extract alpha from the momentum factor prevalent in the market. The overall idea is to create a portfolio consisting of the strongest stocks/sectors while avoiding those that are out of favour.