Sachin is currently responsible for managing investments on the equity side. He oversees some of the LIC flagship funds such as LIC MF Growth Fund, Midcap Fund, Capital Protection Oriented Fund Series (Equity), Dual Advantage Fund Series (Equity) etc. Prior to joining LIC MF, he was associated with TATA Asset Management, CD Equi Search Pvt. Ltd and Innovision Consulting and Tech Pacific (I) Ltd.
LIC Mutual Fund was established in 1989 by LIC of India. Being an associate company of India's premier and most trusted brand, LIC Mutual Fund is one of the well-known players in the asset management sphere. With a systematic investment discipline coupled with a high standard of financial ethics and corporate governance, LIC Mutual Fund is emerging as a preferred Investment Manager amongst the investor fraternity.
In an interaction with IIFL, Sachin Relekar said, “We are cautious, in the near-term, however, we are positive on domestic-oriented businesses from a medium to long-term perspective.”
Excerpts from the interview:
What is your view on cash holdings in mutual funds? Do you see large cash holdings worrying investors as well as managers?
We do not attach a lot of emphasis to the cash holdings of the mutual funds. Though cash holdings of mutual funds signal caution, the market is not just limited to domestic mutual funds. Several other large investors are involved in the Indian markets. In case of some of our schemes, cash holdings have gone up. However, we do not take cash calls. We follow bottom-up processes. We are deploying inflows cautiously post the strong run-up.
In our view, considering the uncertainties faced by the markets, reasons for being cautious are fair. Certain pockets of the market are overvalued, especially financials and small caps. One has to be much more circumspect in allocating capital in the current environment. At the same time, we have a strong macroeconomic tailwind, which should drive investment cycle in the domestic economy in the medium to long-term.
Please elaborate on the impact of GST implementation on the overall economy?
Our interactions with the industry participants as well as consultants provide a mixed picture. Some of the larger players were much well prepared because historically their compliance was always stronger. However, unorganised players and parts of the supply chain were impacted negatively. These are still early days. We think it will take 4-6 quarters for seeing clear effects of the change in the tax structure. Having said that, we view GST implementation very positively. It will improve efficiency in the tax-systems substantially.
Where do you see Indian capital markets at the end of FY18?
We follow bottoms-up approach for all our schemes. We have clearly articulated investment framework for each scheme. Therefore, we don’t take a top-down view on the market. We follow our investment discipline while investing inflows and we keep a close focus on risk management. In the near-term, we are cautious. However, we are positive on domestic-oriented businesses from a medium to long-term point of view.
How frequently do you restructure your portfolio considering the current market conditions?
We review each investment at least on a monthly basis with respect to changes in the prospects as well as risks associated with that specific investment. Whenever we find any investment is not conforming to the framework, we reduce the position and eventually exit. This is a regular process for us. However, our churn ratios are comparatively lower.
Could you please share with us the strategy applied for asset allocation?
It is as per SID for each scheme. We are not managing asset allocation dynamically for any of products. Therefore, there is no specific strategy for the same.
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