This Fairfax-Backed Portfolio Manager Is Betting On Value Investing To Return
As peers bet on safer growth stocks during a period of volatility, Quantum Advisors Pvt. Ltd., India’s fourth-largest portfolio manager, underperformed the benchmarks with its mandate to look at value bets in the broader market.
“Returns last year favoured those following the growth strategy,” IV Subramaniam, managing director, chief executive officer and chief investment officer at Quantum Advisors Pvt. Ltd., said, referring to betting on consistently performing businesses even if they trade at higher valuations. “Value has not been favoured by investors. But value is returning to the market.”
Nearly a third of portfolio management firms from among India’s 60 biggest such managers have beaten the benchmark Sensex’s 12.7 percent gains in the last 12 months. That came as investors piled into heavyweights amid volatility triggered by a slowing economy, liquidity crunch and fears of a global trade war. Mid- and small-cap indices lost money.
Quantum, which manages Rs 14,635 crore of money for largely foreign investors, lost 0.50 percent this year. It was among the three worst performers in the top 10 portfolio managers by assets. In the last three months, however, the firm returned 4.5 percent gains. And it sees opportunity in beaten-down stocks.
Founded by Ajit Dayal, Quantum Advisors is 50.8 percent owned by the management, while Fairfax Financial Holdings Ltd. through its Asia fund holds 49.20 percent.
Its portfolio comprises 25-40 stocks and cash, said Subramaniam, adding that the firm invests in stocks with an average trading turnover of more than $1 million. It holds 2-6 percent in stocks selected from among BSE 200 constituents. “We have 15-25 percent of portfolio invested in companies in the consumer discretionary and another 15-25 percent in the banks and financial sector,” said Subramaniam.
November, however, was another subdued month for portfolio managers. The average return of the top 60 portfolio managers—that collectively manage Rs 1.26 lakh crore of investor money—stood at -0.1 percent. The mid caps witnessed some buying last month with the NSE Midcap Index rising 2.4 percent and the broader market NSE 500 Index rising 1.3 percent.
The average return of the portfolio managers was lower than the BSE S&P Sensex during the month. And only six firms managed to beat the benchmark.
Here is how the top 60 portfolio managers performed in November.
Watch | BloombergQuint’s Sajeet Manghat breaks down the numbers.