What is Prudential ICICI AMCs investment philosophy?
There has been a change in the investment philosophy. From Feb.’98, when Prudential ICICI AMC took charge, the style of fund management has changed. Earlier, we were adopting a top-down approach of investing, ie, identifying the sector or industry to invest in first and selecting a company in that sector later. We have now changed to a purely bottom-up approach. We follow a modified value approach to identify stocks. In this, important ratios like return on capital employed (ROCE), return on net worth (RONW) and incremental ROCE are used in conjunction with the fundamental parameters like management quality, business- and company-specific risks, and intangible assets like brand and distribution. Today, the whole structure of industry is changing. For example, with liberalisation, petroleum will ultimately be a pure consumer product. Our new approach is in line with the changing industry structure. Which industries/companies fit in your new investment approach? Infotech, pharmaceuticals
