Sameer Arora is one of the most renowned fund managers in India. As founder of Helios Capital, Aurora divests personal wealth Between the two funds – one India-focused and one global – in the ratio of about 50:50.
Arora shares his portfolio details and formula for selecting stocks for the special annual Mint Series – Guru Portfolio.
He is and has always remained an equity-heavy investor, accounting for 70% of his current portfolio. shares And 10% each is going to loans, gold and real estate. “I’ve been an equity manager all my life. I don’t like real estate, and I don’t like private equity because I’m a public market guy,” Arora said.
He plans to take the equity allocation to 90-95% when the market turns down.
His overall portfolio has given zero percent (in US dollar terms) returns on a yearly basis. Their India-focused fund is large-cap heavy (75-80% allocation), with most companies larger than $1 billion in market capitalization. His favorite sectors currently are financial, consumption, pharma and technology.
Arora’s investing style involves filtering stocks based on eight parameters – theme, industry, disruption, company history/management/strategy, corporate governance, accounting, medium-term triggers (mostly expected earnings) and valuation.
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If a stock fails on any one parameter, it does not touch it. “I no longer believe in tradeoffs. If a stock is good on all parameters but is expensive, I will not buy it,” he said. “At any given time, about half of all listed stocks will outperform, and half will underperform. There are times of intense market concentration. When smaller numbers outperform, but over the long term, half the market will outperform. It gets better. The main thing is to find the stocks in this top half,” he said.
Arora’s India Dedicated Fund is an offshore (a foreign institutional investor or FII fund). Therefore, it at times shorts certain shares to hedge its position, but remains pure for long. “It protects our downside during bad times, and it helps with compounding, but we are not net short because it means losing out to a growing market. The market has grown manifold over the past two decades.”
Aurora’s Global Fund invests primarily in the US market (about 80% of its assets), but also has select European blue-chip companies such as Nestle and Louis Vuitton. It is the benchmark for the MSCI World Index, and his favorite themes are Tech, Consumer, Financial and Industrial.
Helios’ global fund is currently heavily liquidated (40% of the global fund’s assets). Arora said that he had a negative trend in the US markets in January, after which he sold many shares. However, Arora expects turmoil in global and Indian equity markets to resolve on its own in 3-6 months and is looking to deploy liquidity in the fund in the near future. “A leading indicator will be when US stocks stop falling on bad news.”
The expert admitted that he is not a big fan of private equity. Some of the private equity investments I have made have not done well anyway, he said. A lockdown-induced lifestyle change that will become permanent for Arora is ensuring that he walks more than 10,000 steps every day. He admits to being a huge Chole Bhature fan. He joked, “I think Haldiram should make me the brand ambassador and give me the anchor allocation when I go public. For me, as the founder of an investment management company, the money goes to my investors instead of depositing personal money.” is returning. I have the letters ‘NAV’ as an artifact on my desk to remind me of this,” said Arora, who does not intend to retire.