In an interaction with Kshitij Anand of ETMarkets, Rohan Mehta, CEO & Portfolio Manager at Turtle Wealth Management Pvt. Ltd., highlighted how removing emotional bias from investing and relying on a quant-led framework played a crucial role in navigating market fluctuations.
He explained that the strategy focuses on identifying high-performing stocks based on data signals such as price momentum, earnings strength, and sectoral outperformance, while systematically exiting underperformers.
This process-driven approach, he noted, enables the portfolio to stay aligned with emerging market leaders and adapt quickly to changing market dynamics, ultimately driving consistent performance. Edited Excerpts –
Q) March was a challenging month for the markets, but on a full-year basis in FY26, the Growth Mantra PMS Fund ranked among the top performers, delivering around 20% returns. Could you walk us through the journey and highlight what worked in your favour?
A) Yes, last year our core focus was to be in the top 5 PMS in our category and top 10 overall, which we achieved. This was largely because, as per our quant process, we had a substantial proportion of exposure to silver, the power sector, auto, and PSU banks, which turned out to be strong performers. We were also very keen to trim and exit underperformers.
Q) Your fund follows a quant-based approach to minimize human bias—how does this differentiate you from traditional discretionary PMS strategies?
A) It is totally different. It removes emotion from investments, where the focus is more on profits than on attachment to stocks. We take decisions purely based on data while selecting, allocating, exiting, and reallocating. Every year, our top-performing stocks and sectors change, and for a human to consistently identify all of them is very difficult. The quant process gives an edge over human misjudgment, bias, and emotional ego.
Q) Can you explain your PPP (Price, Profit, People) framework and how it helps in identifying turnaround opportunities?
A) Yes, our process is quite simple. We have three major rules:
Stocks should be at all-time high (ATH) prices
Stocks should be at all-time high (ATH) profits
Stocks should be outperforming the NIFTY 500 and their respective sector
This is a mix of all three attributes of the market—fundamentals, technicals, and momentum—with equal weightage. Based on our 20 years of experience, there is a high probability that this approach helps us identify new winners.
Q) The fund focuses on emerging leadership and turnaround businesses—what key indicators do you track to validate a turnaround story?
A) Every stock with ATH price and ATH profits reflects some level of turnaround, but major turnaround indicators include:
Sectoral and structural demand
New CEO or change in management
New products or services
Changes in regulations
There can be many reasons, but the story must be backed by data. When data supports the narrative, the turnaround story becomes much more robust.
Q) The portfolio holds 15–20 stocks with a bias towards small and midcaps—how do you balance growth potential with risk management?
A) Our investment universe is the NIFTY Total Market, i.e., around 750 stocks. The Wealth Mantra Fund invests in leadership companies, while the Growth Mantra Fund focuses on emerging leaders. We are market cap agnostic, but due to the theme, we may find more mid- and small-cap exposure in the Growth Mantra Fund.
Our risk management is quite robust. We decide the downside exit price before entering a stock and revise it regularly. Also, with our process, it is very difficult to hold weak companies. Even in a market like March, we were only around 6.5% down.
Q) Sectorally, the fund has exposure to capital goods, BFSI, and pharmaceuticals—what is the underlying theme driving these allocations?
A) We follow a pure bottom-up approach and do not focus much on sectors. However, we ensure that stocks are outperforming their respective sectors, making them strong performers. With our quant process, investing in underperforming sectors or stocks is almost impossible.
Q) What are the key factors that have contributed to your ~21% CAGR track record?
A) Our focus is on strategy and performance rather than attachment to stocks. On average, our top performers change every year, as market leadership also keeps evolving. We believe in the mantra of “Buy right, sit loose.”
Q) What triggers an exit or replacement decision in your portfolio?
A) As mentioned earlier, our three parameters are the key triggers. If a stock retains only one of the three positives, we start replacing it with a new performer. This could be due to weak price action, poor results, or underperformance.
Q) The fund is positioned for first-time PMS investors with a moderate to high risk appetite—how should such investors think about allocation and time horizon?
A) For first-time investors, we believe in a dynamic investment approach. We do not follow a model portfolio; instead, we invest in the best-performing opportunities at any given time. The current market presents a strong opportunity, as whenever markets correct by more than 12%, new outperforming sectors and stocks tend to emerge. This is often the best time to invest.
Investors with a 3-year horizon who prefer process-driven investments with a focused approach may find this strategy suitable.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times.)