Aditya Birla Nifty Next 100 PMS

Fund Snapshot

Investment Philosophy

• Years of high success and development have culminated in the ideal combination of growth and quality.
• The Fund would mainly invest in the top 150 stocks (excluding the NIFTY 50), with the aim of outperforming the index by reducing risk and uncertainty relative to pure Small Cap and Midcap strategies.

Unique Feature

• A diversified portfolio, the Nifty Next 100 Portfolio would largely invest in large and mid-cap stocks. The top 150 stocks would be the focus (excluding NIFTY 50). It strikes the ideal mix between growth and quality to occupy the sweet spot between large caps and mid-caps. It aims to produce higher returns than large-cap funds without taking on excessive small-size risk or volatility with minimal exposure to commodities cyclical and well-diversified across secular sectors. Our primary goal is to invest in businesses with robust balance sheets, a history of wise capital deployment, and high long-term capital returns.
• With a broad-based surge in big, mid, and small caps, the Indian stock markets have been among the best-performing international markets over the previous three months. In these challenging and unheard-of times, India shines out among the Emerging Markets, drawing USD 6.5 billion in foreign capital. Despite the aspect that there is still a significant threat from Covid 19, attitudes have improved as a result of a number of developments, including (1) the US elections that produced a Democrat as president but a Republican in the Senate, (2) a decline in the number of active Covid-19 cases in India, (3) improving high-frequency indicators, (4) a positive surprise in 2QFY21 earnings, and (5) the success of Covid vaccine trials. Sectors including banking, metals, pharmaceuticals, and IT kept driving the market upward. Mid and small caps outperformed large caps as market breadth increased.
• Covid figures on the domestic front have improved as the number is declining by more than 50% from the high. Due to festival season and pent-up demand, high-frequency signs point to a significant recovery. As the economy opens up, the majority of activity indexes are slowly regaining their pre-Covid levels. The government has also declared a number of initiatives to spur the economy, and the monetary policy has remained accommodating with no rise in interest rates.
• The essential takeaway from this is to continue investing in ethical companies. Even after this rise, they see value in many businesses, particularly small and midcap firms, that have the potential to provide significant returns over the next two to three years. A few other metrics, such as the yield gap and market capitalization to GDP, also hint at solid returns in stocks over the medium run.
• They remain committed to our approach of seeking businesses with solid management teams, solid financial standing, a turnaround in earnings trajectory brought on by macro and micro-factors, and ownership of structurally high-growth brands. While the Corona vaccine and how quickly the economy recovers will determine the business climate in the short term, India’s long-term economic trajectory is unaffected.
• The opinions presented in their declared portfolio are those of the Nifty Next 100 Portfolio’s fund managers and shouldn’t be interpreted as investment advice. There is zero assurance or guarantee that the product’s objectives will be met while investing in securities because of market risks. Performance in the past might or might not continue in the future.