Keep mid-caps in portfolio

Mahesh Patil, co-chief investment officer of Aditya Birla Sun Life AMC, has 22 years extensive experience in fund and investment management, equity research and corporate finance. He joined the firm in 2005 as fund manager and was elevated as head of equity in 2008. In 2011 he became the co-CIO of the AMC.

Prior to this, he worked with Reliance Communications in the business strategy and corporate finance division between 2001 and 2005. He was also a senior research analyst at Motilal Oswal Securities between 1996 and 2001.

At co-CIO, Patil spearheads equity investments at Birla Sun Life Asset Management. He has a team of fund managers and equity analysts to help him in the task.

Investment strategy

The AMC follows a bottom-up investment approach and invests in various sectors. The AMC has several systems and protocols in place to identify stocks and make buy and sell decisions. Every fund manager has a group of equity investors. Each equity analyst will cover one large and a few small sectors. Across these sectors each analyst covers a few stocks. In all, the equity analysts end up covering hundreds of stocks.

They track the quarterly results of these stocks and meet the company officials every half-year. Based on the information derived out of these researches, the fund manager takes decisions on selling or purchasing the shares of a company.

Advise to investors

Patil believes the market currently is in a consolidation mode and hence it is a good time for investors to enter with a long-term investment view, as valuations of some of the small- and mid-cap stocks have become reasonable. An investor can allocate 20 per cent of his/her corpus to mid-cap funds. With earnings growth supporting the market, investors should buy into corrections and continue to build equity exposure for the long-term.

Considering the current scenario, he believes that rupee depreciation will support export-oriented sectors like IT and the consumer discretionary space with sectors like auto, small appliances and white goods likely to perform well.

Patil advises investors to go for debt fund if they are investing for a shorter term and in case they want to invest in equities, large-cap funds are preferable. If the investor is going for a long-term investment, the portfolio should contain mid-cap, large cap and multi-cap funds. He considers equities as a suitable instrument to create wealth for the long-term.