Investment Committee

Investment Philosophy

Our investment philosophy is guided by a simple principle: own strong businesses at reasonable valuations. Owning strong businesses in their respective domains reduces the risk of permanent capital loss and paying reasonable valuations mitigates the risk of poor long-term returns. Further, as the time horizon increases, the risk in equities reduces. We aim to follow a low churn strategy that also lowers costs.

Portfolio Characteristics

In line with the Investment Philosophy of 3P, nearly 79% of the Fund (additionally there is 9% in cash) in our judgement comprises of companies that enjoy leadership / strong positions in respective businesses and should be able to increase / maintain their market share. The portfolio is well diversified across key sectors and economic variables. The Fund is overweight Banks, Insurance and Pharmaceuticals; underweight Automobiles, Capital Goods, Consumer and Software & Services. Exposure to Materials and Telecom is close to market weights.

• In our opinion, portfolio companies follow good ESG practices. Interestingly, companies in conventional power have plans to rapidly scale up their renewable portfolio.

• We believe that, following recent outperformance, Small and Mid Caps (SMIDs) as a category are once again expensive relative to large caps. Therefore, we have adopted a selective approach to investing in SMIDs and the portfolio is tilted towards large caps.

• Currently, the Fund is well-diversified due to low dispersion in valuations across sectors. If and when we see meaningful divergences in some pockets, we will look to consolidate the portfolio holdings.