How well do you know the fund managers you invest with? Beyond the statistics and performance charts lies a deeper understanding that can help you make informed decisions: their core investment philosophies and personal beliefs. This is the heart of our Know Your Fund Manager series, where we delve into the minds of the individuals managing your money.
We want to bring you information on various aspects such as their investing style, how often they deviate from it or are allowed to, how they react during corrections, how they navigate through information clutter, how they manage competition and underperformance, and most importantly – what investors should expect from staying invested in their fund.
For the second episode in this series, I had the privilege of meeting with Rajeev Thakkar, the Chief Investment Officer of the PPFAS Mutual Fund. I got to pick his brain on his core investing philosophies. Thakkar didn’t hold back, sharing his perspective on everything from selecting stocks, handling FOMO and managing expectations. As I said earlier, the conversation ventured beyond investing, diving into his personal philosophies and what keeps him driven.
For starters, Thakkar manages five funds in PPFAS AMC (asset management company) with Parag Parikh Flexi Cap Fund as the flagship scheme. The other four funds include a liquid fund, a tax-saver fund, a conservative hybrid fund, and an arbitrage fund.
Watch the full video here –
- Long-term focus: Thakkar said he focuses on long-term investing and does not try to time the market. He avoids strategies such as momentum, which is “akin to trading.” For the question on value vs growth style of investing, he said that he believes growth is part of value.
- Quality businesses: Talking about the parameters for selecting a stock, he said he looks at strong management, good quality business, and reasonable valuations.
- Emotional control: He tries to control his own emotions and not get swayed by the ups and downs of the market. He prefers this behavioral edge over an informational or analytical edge in investing.
- Overcoming behavioral biases: Over the last few years, he has worked on not focusing too much on price by learning to pay a bit more for quality businesses. He sticks to the principle that “it is better to pay a fair price for a good company than to get a bargain on a bad business.”
- Investor’s expectations: The Flexi-cap fund has delivered decent alpha (excess over benchmark) since its inception in 2013. There were also periods when the fund has underperformed for short periods. He said what investors can expect from the fund: “Future could be uncertain. But by past performance, the fund may not always deliver the highest returns but may provide decent downside protection when markets correct.”
I look forward to talking to other fund managers and sharing what I learn with you all.