QUALITY TRUMPS VALUE OVER THE LONG TERM

The next three years will likely be positive for a focused, growth-oriented investing

- Vikaas M. Sachdeva

In a market environment where only 35% of portfolio management services (PMS) strategies have outperformed the broader indices, a disciplined approach on the part of PMS funds continues to deliver exceptional value for investors. Q2FY25 was a reset quarter. FIIs were selling due to higher valuations and concerns about earnings growth, which was in single digit and not broad-based as it was in 2023. Investors are being selective, so companies that deliver high growth will start outdoing value or momentum stocks. The next three years will likely be positive for a focused, bottom-up, growth-oriented investing.

Quality vs value

Quality-focused growth-oriented fund houses—which focus not just on growth but quality and duration of growth, the total addressable market, and the moat and self-sufficiency of the business—have outperformed value and momentum stocks, especially over long periods of time.