ETMarkets Fund Manager Talk-Using “BMV” metric, this Rs 3,600 cr fund manager tries to add alpha in portfolio

economictimes.indiatimes.com:

MUMBAI — Baroda BNP Paribas Mutual Fund is unperturbed by the rally in domestic equities and believes that mid-teen returns are likely over the next 1 year given the strong fundamentals. Asked about how the fund aims to generate alpha returns for its investors, Jitendra Sriram, a senior fund manager at the asset management firm, shared the “BMV” metric adopted by the company in its hybrid fund to achieve the same.

“We triangulate between business prospects (B), management capability (M), and the valuations (V) to arrive at which sectors and stocks to take exposure to, and by corollary the ones to be underinvested in,” Sriram said. Edited excerpts from an interview with ETMarkets:Although markets have hit record highs, India has still underperformed its EM and DM peers on a YTD basis. Do you see scope for a trend reversal?India’s macro stability has surely been on an uptick over the past few quarters.

In our view, a lot of factors which were headwinds for India in the aftermath of the Russia-Ukraine conflict, have now become supporting factors. Also, this valuable time correction on markets, coupled with the compounding factor on earnings has made valuations far more in sync with the long-term averages than the levels in the beginning of 2022.

We are, therefore, not perturbed by the markets hitting record highs and we do believe that the fundamentals seem to suggest mid-teens returns hereon over a 12-month period.How much AUM do you directly oversee at the fund house? Which are the funds you manage?Personally, I look at a few strategies at Baroda BNP Paribas Mutual Fund. One being the Baroda BNP Paribas Large Cap Fund, the second being a hybrid scheme which is Baroda BNP Paribas Aggressive Hybrid Fund, and the third being