IME Concentrated Microtrends
Flexi-cap fund (large & midcap bias) that invests in value-creating microtrends.
About IME Concentrated Microtrends
Concentrated exposures to specific microtrends with the highest value-creation potential
Portfolio constructed across 4-8 microtrends, with 20-30 holdings
Twin-engine investment philosophy helps identify both microtrends & companies
Concentrated microtrend exposure helps deliver outperformance with higher-quality & larger companies
Fund managed by Ashi Anand - over 2 decades of fund management experience, with sustained outperformance
Understanding Microtrends
Microtrends are pockets of the economy with greater value-creation potential
Microtrends are different from sectoral or thematic funds with their much granular focus on sub-trends within specific themes
Value creation by microtrends is dynamic and often differs based on unique economic and market conditions
How do Microtrends differ from Macro-trends, Sectoral or Thematic Funds?
To understand micro-trends better, we can take an example of Financial Services in India. Structural Reforms and the Strong Demographic dividends of India are macro-trends that are aiding growth for financial services. The BFSI Sector in India, can be broken up into the Banking, NBFC, Capital Market & Insurance Industries. Microtrends within financial services include Asset Quality Normalisation for Corporate Banks, Value Migration towards Financial Franchises, or the Financialisation of Savings.
Micro-trends are not sectoral or thematic in nature - they are specific sub-parts of a sector, theme or the economy where we see the greatest potential for value-creation within the larger investment universe.
Microtrend case-studies
Every market cycle has certain underlying trends that drive the greatest value creation, which we call microtrends.
Examples of microtrends we are currently investing in
Asset Quality Normalisation
We expect the discount of leading corporate & secured retail financiers to narrow versus retail bank leaders, as corporate asset quality normalises leading to an improvement in growth & profitability ratios.
Financilisation of Savings
Strong secular trend with significant amount of household saving/net worth in physical assets (Real estate and gold) moving away from these towards equities + insurance along with demographic tailwinds provide a big opportunity
Digital Disruption
Digital platforms are amongst the highest growing companies, with their current high losses being due to hyper-growth investments. As these companies turn profitable in coming years, substantial value creation is expected to play out.
Consumer Aspirational
Rising consumption demand is a clear multi-year theme on the back of strong demographic trends, rising incomes & aspirations and changing consumer preferences.
Capex Revival
Starting with China +1 and India’s timely response with tax cuts and PLI incentives - a confluence of factors are driving the rise of manufacturing and green energy transition in India. This is expected to lead to a capex recovery.
Lending Franchises
Expect leading lending franchises to continue to compound investor returns, driven by the large growth runway driven by value migration from PSU banks to private lenders.