ETMarkets PMS Talk: In small cap investing, if you avoid landmines, you are left with are goldmines: ArunaGiri
“In small cap investing, if you avoid landmines, what you are left with are goldmines. Our focus is on containing downside risks. We firmly believe that if you do that job well, the upside will naturally follow,” says ArunaGiri N, Founder CEO & Fund Manager, TrustLine Holdings Pvt Ltd. In an interview with ETMarkets, ArunaGiri said: “We firmly believe that by avoiding excessive leverage, we can mitigate a significant portion of risks associated with small cap investing” Edited excerpts:Your deep value fund has been in the market for more than 15 years with a CAGR of over 17% that is very impressive. Tell us more about your journey in markets where we have seen global financial crisis as well as deep corrections as well? As fate would have it, the global financial crisis (GFC) unfolded shortly after the launch of our new intrinsic deep value fund.
Looking back, what initially appeared to be a setback turned out to be a blessing in disguise. The fund was launched in Sep’07 just as the markets were reaching manic highs. However, we exercised caution and refrained from fully deploying our capital, keeping a significant portion in cash.
When the crisis struck, we were well prepared with only 20-25% of our fund deployed. All through the fall in 2008, we had the cash to be deployed in a gradual and strategic manner, undeterred by the prevailing macro noise. This approach had a profound impact on the subsequent returns we generated in the fund.
Our ability to sidestep the narrative and to focus on the cycles/price action gave a distinct edge in our investing process. Be it 202-13 policy paralysis or 2020 pandemic, we had capitalized on every crisis to construct and build a resilient long-term portfolio. This has been the key
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