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Dec 26, 2017 05:08 PM IST | Source: CNBC-TV18

Gaurav Mehta on Ambit's Emerging Giants, Good & Clean Smallcap Fund

In the fund there are several consumer names both from the staples basket as well from the discretionary basket, said Gaurav Mehta, Fund Manager,Ambit Asset Management.

CNBC TV18 @moneycontrolcom

Midcaps have been the clear stars of 2017 and are the newsmakers. Ambit recently launched an Emerging Giants, Good & Clean Smallcap Fund.

To talk more on that, CNBC-TV18 spoke to Gaurav Mehta, Fund Manager, Ambit Asset Management.

He said small caps is a large basket of stocks compared to the largecaps and this liquidity driven rally lead to lot of move in the low quality smallcaps rather than better quality ones.

So for a foreign investor who is looking to create a portfolio of say 15 names, there is no dearth of good quality smallcap ideas.

If one is an investor with a holding horizon of two-three years the valuations or beginning price to earnings (Pes) are not so relevant. We look for companies that will compound their earnings and focus more on the E part of PE than the P.

Therefore, there are still emerging giants in the smallcap universe that will create wealth for shareholders over the next several years.

Talking about the sectors they focus on, he said in the fund there are several consumer names both from the staples basket as well from the discretionary basket that may easily compound 20 percent plus for next several years and are trading at massive valuations discounts compared to their largecap peers, said Mehta.

For the full discussion, watch video
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