Groww Multicap Fund – the first mainstream diversified actively managed fund that the AMC is launching after assimilating and remodelling the erstwhile IndiaBulls MF schemes, will follow a Q-GARP philosophy and an interesting mix of top down and bottom up approaches for different segments of the portfolio.
Groww has modified the time-tested GARP (growth at a reasonable price) to add a quality filter (hence Q-GARP) as Anupam says the biggest determinant of a company’s wealth creation ability over time is corporate governance. Quality for too long has been misconceived as B2C brand owning businesses – in reality, we have quality cyclicals as well as quality compounders.
Incremental RoE is his litmus test for stock selection as markets reward incremental RoE much more than just profit growth.
He does not believe in buy-and-hold in large caps – you need to be very nimble and must have a clear top-down approach from macro to sector view to stock selection if you want to drive alpha in large caps. Opposite is the case with mid and small caps – here, you need to be very bottom-up focussed to pick and ride winners.
The new Groww Multicap fund will be more tilted towards equal weights across the 3 cap size segments than peer funds which tend to be more large cap tilted. Anupam says you will find this multicap fund more true to label than most.
The fund’s initial portfolio may likely be overweight banks, healthcare, consumer discretionary and capital goods, neutral weight IT and underweight consumer staples.