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SBI Bluechip Fund

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SBI Bluechip Fund
Morningstar India - 08 January 2020

Sohini Andani is an experienced portfolio manager and an astute stock-picker. Her extensive experience as an analyst and a research head stands out in her bottom-up approach to stock selection. We also view the presence of CIO Navneet Munot and head of equities Srinivasan as a positive. In our opinion the trio of Munot, Srinivasan, and Andani constitute the core pillars at the AMC and have been instrumental in structuring the processes within the fund house.

The Bluechip fund is a relative-return strategy focused on incremental fundamental change, positive market expectations, and relative valuations, measured by sales growth, EBITDA margins, and market share changes. They look at companies in terms of their visibility of growth and undertake company visits to evaluate their business models. They have an active universe of stocks that are reviewed on a quarterly basis. The filters for relative and absolute funds are clearly defined, but stocks could fall into either framework, and the differentiation could blur. The fund has largely kept an orientation towards growth stocks and is focused on long-term (three- to five-year) visibility. The team tends to avoid momentum-based ideas and focuses on bottom-up stock-picking which overlooks short term market aberrations. We think their approach towards investing in companies with a high environmental, social, and governance score is a positive measure towards maintaining a “clean” portfolio. Valuations are looked at on an absolute basis relative to the stock’s 10year history. While they avoid event-based investing (possibility of a merger/acquisition, for example), they tend to invest in IPOs.

Sohini Andani aims to invest in companies with a relatively high risk/reward ratio. The fund runs a benchmark-aware strategy with an internal limit sector limit of 8% and a stock limit of five ßper cent versus the index.”

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