L&T Investment Management has won the Morningstar Best Fund House (Equity) Award 2018 for the first time. The other two contenders along with L&T were Aditya Birla Sun Life Asset Management and ICICI Prudential Asset Management.
The annual Morningstar India Awards recognise funds and fund houses that added the most value for investors within the context of their relevant peer group not only over the past year but over longer time periods. Morningstar selects the finalists using a quantitative methodology that considers the one, three and five-year performance history of all eligible funds and adjusts returns for risk. Read the full methodology here.
Due to its stellar fund performance across equity schemes, L&T Mutual Fund’s asset base has grown by 71% from Rs 35,191 crore in December 2016 to Rs 60,313 crore in December 2017.
In the past, L&T Asset Management Company has grown through acquisitions. It acquired the asset management license through the acquisition of DBS Cholamandalam AMC in Sept 2009. It acquired Fidelity in 2012, and in our opinion, the fund house has a good foundation in place since taking over Fidelity’s mutual fund business in India.
The processes have been structured in line with the fund house’s goals and the investment team has remained stable. The experience and knowledge that the core team brings to the table is crucial, as the research team that supports the investment team is smaller than some of its peers.
The investment process is robust with a combination of bottom-up and top-down investing that is focused on investing in companies that are efficient allocators of capital. Thus, return on capital employed is one of the critical parameters used for evaluation. The managers focus on the profitability and attractiveness of a business, competitive position within its industry, and stage in the business cycle.
This combination of a solid investment process run by experienced and able managers has resulted in superior risk-adjusted returns over the long term for investors.
