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Notwithstanding difficult market conditions, Atul Bhole's long tenure and strict adherence to the process framework are a huge asset to the Fund. His framework is built on three fundamental pillars: good quality companies, good management, and growth companies. Despite facing challenging moments, we have been impressed by his steadfast adherence to his framework and unchanged process approach, as well as the fund's exceptional performance during favorable market conditions. With an upgrade of the Process Pillar to Above Average from Average, in line with the People Pillar rating, the fund’s direct share class has been upgraded to a Morningstar Analyst Rating of Silver from Bronze, while the regular share class has been upgraded to Bronze from Neutral.The frequent changes to the equity investment team have been a cause for concern. Over the past few years, the team has lost some key managers such as S. Naganath (CIO), Anup Maheshwari (CIO-equities after Naganath), Harish Zaveri, and Gopal Agrawal. Though the equity team is relatively better placed despite exits, we would like to see better stability both on the fund manager side and in the analyst team. Manager Bhole has an overall experience of 15-plus years. He has been at the helm here for almost seven years now and is well supported by a 14-member analyst team.Bhole’s investment style is fundamentally driven with extensive focus on quality. He plies a growth-oriented approach while selecting stocks with little or no heed to valuation. One of the defining aspects of his investment style is his benchmark-agnostic approach. He doesn’t shy away from avoiding a stock if it doesn’t meet all his selection parameters, even if it’s an index heavyweight. Bhole has his own style of investing, which complements other managers from the team. His execution of a simple and straight forward growth-oriented strategy has been noteworthy. However, it is important to acknowledge the risks here. Bhole’s benchmark-agnostic approach means the fund’s portfolio and performance can significantly diverge from the index. Also, its huge growth tilt may expose the fund to above average volatility when markets witness a downturn.We have had the chance to evaluate Bhole and his investment style over the past seven years. During this period, while there have been phases where his style has been out of favour and therefore the fund’s performance suffered, the fund roared back when the tide did turn his favour, reinforcing our conviction both in Bhole and his process framework.
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