How Kumar's Focus on Value Investing Shapes His MF Bets

Inside FundsIndia research head's playbook for navigating market cycles with value funds

- Sashind Ningthoukhongjam

Arun Kumar, vice-president and head of research at FundsIndia, has a distinct style of investing in mutual funds, one that leans heavily on value investing. Around 55% of his portfolio is parked in funds that follow a value style of investing.

In an interaction with Mint for the Guru Portfolio series, Kumar shared his contrarian approach when it comes to picking mutual funds for his portfolio. "I like it when certain investment styles or investment approaches are not doing well," he says.

What has changed in your portfolio in the last one year?

I have always been equity-heavy. Currently, my portfolio is 90% equity, and the remaining 10% is in debt and arbitrage funds. I'm comfortable with this because my wife and I have active income and contribute 10-15% of the portfolio value each year.

Even during bear markets, we contribute to the portfolio. However, as our portfolio grows over time, our savings might not catch up with it. There will be a time when our portfolios will become so big that we'll not be able to add meaningfully (less than 5%) to our portfolios. At that time, I will shift to a more conservative portfolio and keep it 70% equity, 15% gold, and 15% debt and debt-like investments.

How have you structured your equity portfolio?

A chunk of my portfolio, 55%, is in four funds. I have a natural bias towards value investing as a style and have invested in funds that fund managers manage with a value bias. It's split across Sankaran Naren's ICICI India Opportunities, Rajeev Thakkar's PPFAS FlexiCap, Kenneth Andrade's Old Bridge focused equity fund, and HDFC FlexiCap, which Prashant Jain earlier managed.