Bandhan Aggressive Hybrid Fund’s winning playbook: Discipline, diversification and long-term focus

Edited excerpts from a chat:

What factors are driving the Bandhan Aggressive Hybrid Fund’s consistent outperformance over 1, 3 and 5 year horizons?

I generally don’t manage the Bandhan Aggressive Hybrid Fund based on major macro calls. The outperformance is largely due to strong stock selection, which in turn results from a disciplined investment process. Our approach combines in-depth bottom-up research with a long-term investment horizon. Naturally, the market environment has also been supportive over the past eighteen months, which has benefited our performance.

With equity allocation currently at the high end of the target range, what signals are underlying this belief in equity-led growth?

We follow an aggressive strategy that stays true to the label, which generally keeps us positioned at the top end of our equity allocation range. The portfolio maintains a balanced mix of large, mid and small cap segments. I think earnings growth could start to accelerate in the second half of FY26, led by domestic cyclicals and select global cyclicals. As of September, the fund’s equity allocation was approximately 78%.

Can you tell us how you adjusted your portfolio in September and why?

There were no major changes to the portfolio in September. The only notable adjustment was a marginal increase in exposure to the auto sector in consumer durables, following the rationalization of GST rates.

Capital goods are one of your biggest considerations. What is the logic behind that as it seems that the market preference is now shifting from the investment theme to consumption.

The first signs of a shift from capital investment to consumption were visible in the previous budget. Our exposure to capital assets is highly selective. We currently have a preference for companies that are positioned to benefit from the energy transition. This is not just an India story; the world is increasingly powered by electrons rather than molecules, and we believe this structural shift will continue to create opportunities.

How does the multi-cap, multi-style value and momentum strategy ensure resilience across market cycles?

Our focus is on assessing the potential IRR that a medium-term impact can deliver. If an investment meets our return threshold, we are happy to include it in the portfolio. What we consistently apply is sensible diversification and disciplined risk management, ensuring we are not exposed to excessive active risk regardless of market stage.

What is your one counter-bet in the current market scenario that you think many investors are missing out on?

Rather than naming a single sector, the focus is on select large and mid-cap companies in the consumer, domestic and global cyclical sectors that were once the market’s favorites. Many of these stocks, which previously traded at high valuations, now appear reasonably priced relative to their growth potential.

(Disclaimer: Recommendations, suggestions, views and expert opinions are their own. These do not represent the views of the Economic Times)

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