'Don't cling to stocks hoping for recovery’

Age: 46 years
Qualification: BCom, CFA, MFM
Current position: Fund manager, UTI AMC.

My annual target for the fund

To do better than the benchmark and be among top 50% of the relevant peer set.

My outlook for 2011

Cautiously optimistic. Volatility may increase due to less support from valuation of the market, strong foreign portfolio flows of the past and expectation of global recovery. Stock-specific approach will help to score over the benchmark.

The Swati Kulkarni way of investing

Invest in scalable businesses at a reasonable price.

5 things my stock-picks must have

Competitive advantage, strong balance sheets, visibility on earnings growth and free cash flows, attractive valuation and corporate governance.

I don’t touch stocks that

Have low returns on capital, highly leveraged balance sheets and a tainted past.

My risk appetite is

Moderate. My attempt is to deliver superior risk-adjusted performance.

One bias I try to control

Loss aversion i.e., tendency to hold on to investment with a hope of recovery.

Stocks that are hot on my list now

Banks, technology and cement.

What I do differently

While I stay invested in core portfolio for the long term, I am an opportunist on tactical portfolio moves. I wait patiently to invest at reasonable prices, rather than chasing momentum.

My own money is invested...

In equity mutual funds 30%, FD 10% and the rest for my house.

What I like about my job

Continuous learning about different companies, their responses to changing business environment, and to be able to utilise my experience and formal finance training in wealth creation for our investors.

Small investors should

Invest regularly through SIP and think of equity as long-term investment. Choose pure vanilla diversified equity funds for core equity exposure and top it with specialty or thematic or sector-equity products.

How frequently do you churn portfolio?

It ranges between 25% and 65%.

My best decision

Overweight on technology and two-wheeler companies.

My worst decision

Early profit taking in non-ferrous metal stocks.

Which books have influenced your investing process?

Beating the Street by Peter Lynch and CFA curriculum.

(As told to Khyati Dharamsi)