Farewell from Taurus Mutual Fund

Personal Update!

I’ve decided to move on and join another fund. I’m extremely grateful to work with talented team at the Taurus Mutual Fund . And I’m extremely grateful to Kanishk Kapur for providing me the opportunity to manage multiple funds. Kanishk, at a very young age, is one of the best leaders I’ve come across. Taurus is in great hands, and I mean it dearly. Additionally, Taurus provides an empathetic work culture, understanding that work is part of life than the other way around. It was a great experience in getting to know all the people there and learning from a great bunch. Thank you so much!

Note on what we accomplished during my time here:

I managed the Taurus Tax Shield Fund from 05 May, 2022 through August 04, 2023 and the Taurus Nifty 50 Index Fund from 01 November, 2022 through August 04, 2023.

Taurus Tax Shield Fund

As soon as I took over, we took a relatively more concentrated approach toward portfolio construction than other mutual funds. Our holdings went from 45 to 28 in the first month, and since then, that number stayed below 30. Here are our Monthly Factsheets.

As per Value Research, the Taurus Tax Shield Fund ranked 22/29 on May 05, 2022 on a 1 year basis, and it is ranked 6/33 on August 04, 2023. We consistently ranked among the top quartile during my 15 months tenure as a Fund Manager. During this period, the fund’s NAV grew 17.82% outperforming our benchmark S&P BSE 500 Index that rose 15.15% and an average ELSS Fund’s NAV that grew 16.40%.

I wish to talk about longer track record than just 15 months, but this is what I’ve got at this moment.

While there’s not much that one can conclude from my outperformance over such a short span of time of 15 months, our strategy was very long term oriented as outlined here. 7 out of our top 10 positions remained unchanged during my short tenure. We outperformed our peers and our benchmark while keeping relatively high cash levels, sometimes going as high as ~17% (our mandate commands us to not go above 20%). As all the major Indian indices advanced >15% during this period, I suspect that we lost at least 140 basis points, just because we maintained higher cash levels. I believe in resilience over optimization and reducing fragility in my portfolio. Hence, I consider these results satisfactory.

Some of the biggest contributors to our outperformance were our top holdings across various sectors and market capitalizations including Large caps such as ITC - a tobacco and CPG/FMCG business, Bajaj Holdings and Investment - a holding company with stakes in an automaker and a non-banking financial institution, Larsen & Toubro - the largest engineering, procurement and construction company, Axis Bank - a major private retail and corporate lender, and small caps such as Gujarat Pipavav Port - a port for bulk containers cargo, Mrs. Bectors Food Specialities - a CPG/FMCG business, and Narayana Hrudayalaya - a hospital franchise.

Taurus Nifty50 Index Fund

To be competitive in the market with our index fund offering, there are certain challenges in managing an index fund with such a small size. We cannot rebalance as frequently as our peers do as it will increase our costs. Hence, it becomes harder to reduce our expense ratio and tracking error actively and effectively, as those are the most important factors for an investor seeking to invest in a low-cost index fund.

However, we have been able to reduce our tracking error from 0.73 on November 01, 2022 to 0.36 on August 04, 2023. We were able to do so by understanding our cash flow better and rebalancing our portfolio opportunistically. Here are our Monthly Factsheets.

I thoroughly enjoyed my time at Taurus, and I hope the team builds on this momentum in these funds and continue to move forward, while rewarding the talented people in the organization and supporting those who struggle.