ETMarkets Fund Manager Talk: Structural trend of SIPs strong, set to grow further: K Dileep, Geojit Financial

Having started his career with

23 years back, Dileep’s prime responsibility is to construct and manage portfolios of its clients.

Edited excerpts:

Tell us something about yourself? How did you fall in love with equities – what was the turning point?

I started my career with Geojit Financial in the year 1999 after completing my graduation in Commerce. Right from the start, I used to watch the stock market very closely and follow its trends.

I used to watch investment stories and read investment experiences of proficient investors and fund managers. My thirst to know more about the market created a passion for equities. Since 2010, I have been a portfolio manager for Geojit.

How much AUM do you manage and how has the fund performed so far in 2022?

We are managing close to Rs 500 crore. Our portfolios have performed very well in 2022, especially the Advantage Portfolio. As of September 2022, the one-year return of our Advantage Portfolio is 11.4% compared to Nifty

Midcap 100, its benchmark returns of 0.90%.

2022 is slowly turning out to be a rollercoaster ride for investors as well as fund managers with too many variables impacting the Indian market. How are you managing the volatility in your fund?

Volatility is part of fund management. When we see a long term return of 15% CAGR, volatility (especially coming down) is a boon, and we would like to add stocks at lower levels to enhance the returns in the long term. We have seen volatility during the Lehman crisis, PIGS crisis, COVID, and all finally led to superior returns if we have invested during the crisis time.

Why are FIIs selling the best performing market? India stands out among the EM pack, but is still facing outflows. When will the trend reverse?

Even though we are the best performing market, FIIs’ risk appetite is expected to come down when the US Fed hikes interest rate. Hence, they are likely to reduce their risk exposure in emerging markets. The trend will reverse as soon as the Fed signals the interest rate has peaked or inflation has peaked in US.

What is the kind of cash level you are sitting at – are you putting aside more cash to be deployed later?

We were holding an average cash of 3% till last month, of which we have deployed one third last week. At present we hold only 2% cash.

Where do you see markets in Samvat 2079?

This year will be sector specific and stock specific. Market may be neutral to positive in the first half, whereas in the second half, it is likely to be much better given the Fed may stop hiking the rates.

Which sectors according to you could remain in the limelight till next Diwali?

Banks and pharmaceutical sectors are attractive.

What are your top holdings, and did you rejig your portfolio recently? Any new entry or exit in your portfolio?

, , , are our top holdings. We did not exit any, but booked some profits in Tata Elxsi.

SIP contributions have only increased significantly in the past which is a positive sign for Indian markets. Do you see the trend continuing? Any ballpark figure you see by the end of FY23?

I am seeing this as a structural trend, given today’s youth do not want to lock in their money in real estate or any hard assets as they prefer moving to a new city/country for better career opportunities.

Moreover, financial assets awareness is increasing. Also, SIPs have given good CAGR returns in the long term in the past.

Hence, we see this trend continuing and indeed the growth rate is likely to increase further. I don’t want to settle on any ballpark figure, but am directionally very positive.

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