Anup is building out 360 One AM very differently – he measures success on alpha generation and not AuM growth. His aim is to build one of the finest alpha shops in the business.
A focus on year-on-year alpha generation is aided by a highly differentiated investment philosophy. He doesn’t believe in getting boxed into growth vs value – rather, his unique SCDV four quadrant approach guides him to be over and underweight as appropriate to the phase of the cycle we presently are in.
On a 2X2 matrix featuring ROE and rate of earnings growth, seculars (both >15%) feature in the top right quadrant, defensives in the bottom right, cyclicals in the top left and value traps in the bottom left. The idea is to remain overweight seculars, remain underweight value traps and decide on weights between defensives and cyclicals based on the stage in the cycle. Currently, Anup is overweight cyclicals and underweight defensives.
Global interest rates will head lower, but not dramatically so. US dollar should be a bit weak this year, which will help EM currencies and markets as also commodities. Lower interest rates are usually positive for equity markets, but a lot of that – particularly in the US – is already priced in. Expect global equities to consolidate this year and commodities to outperform.
On Indian equity markets, earnings growth is paramount going forward and as such, more than sectoral views, one needs to drill down to individual stock level. Anup is optimistic on pockets of growth in financials, in commodities and in pharma for CY24.