PGIM India’s BAF model sets itself apart with its simplicity that doesn’t sacrifice dynamism and its complete transparency.
The model uses a 15 yr moving average of P/E coupled with a 20 day moving average of the same metric that allows it to capture both long term and short term trends using the same metric – rather than using different metrics that can contradict each other and therefore give rise to more judgement based rather than rule based decisions.
It puts up its model’s indicated asset allocation on its website, which is continuously updated – thereby giving distributors and investors a level of transparency on asset allocation that few can match.
The fund has underperformed in the last 1 yr as its quality + growth focused investing style underperformed value.
While he awaits revival of quality + growth style, Utsav has moved to a more benchmark aware strategy at a sector level even as he focuses on identifying sub-sectors within each sector where he sees the best growth prospects.
Utsav is very bullish on auto ancillaries, consumer durables and other select consumer discretionary sectors including food services – which he believes can surprise meaningfully upwards over the next few years.
Utsav is confident that the portfolio is well positioned to deliver healthy returns going forward – and will not be solely dependent on quality + growth style outperforming value. Initial green shoots on performance in the last few months are encouraging – but Utsav hastens to add that he is here to ensure consistency of healthy performance over the next few years and not few months.