Shriram Asset Management Company has launched a Multi Sector Rotation Fund, an actively managed fund that will rotate investment across identifiable trending sectors that are performing well.
The fund aims to achieve capital appreciation over the medium- to long-term by capturing opportunities in outperforming sectors and reducing exposure to underperforming sectors.
It will invest in a minimum of three to six trending sectors based on the relative momentum of these sectors, and will exit them when indications suggest a weakening trend.
The sectors will be selected based on Shriram AMC’s proprietary Enhanced Quantamental Investment framework. Quantitative factors will be used to shortlist trending sectors, while the sectors so identified will be vetted based on fundamentals, including macro-economic parameters, investment indicators, sentiment, and prices before final sector selection.
Once the sectors are selected, stocks from each sector will be decided bottom-up by EQI strategy, with the fund manager taking the final decision on portfolio construction and rebalancing.
Kartik L Jain, Managing Director & CEO, Shriram AMC, said while investors would benefit from the uptrend in a particular sector, they usually remain invested even when the trend reverses or plateaus, due to inertia or behavioural biases.
The new fund aims to address this investor pain point to help them avoid sector traps and, instead, ride sector trends by rotating across sectors in a timely manner, he said.
Deepak Ramaraju, Sr Fund Manager, Shriram AMC, said the two-tier approach of first doing sector selection based on relative trends, and then stock selection, ensures that the fund remains true to label.
