Generating alpha in the stock market is not about chasing momentum but about identifying businesses at the cusp of transformation before the broader market catches on, says Anuj Jain, CIO, Co-founder and Director at Green Portfolio Pvt Ltd.
In an interaction with Kshitij Anand of ETMarkets for the PMS Talk series, Jain explains how his team differentiates genuine turnaround opportunities from value traps, why patience is critical in special situation investing, and why India’s manufacturing and industrial expansion could emerge as the defining investment theme over the next decade.
He also cautions investors against extrapolating past returns, stressing that disciplined processes, not extraordinary historical performance, drive sustainable wealth creation. The following are edited excerpts from the chat:
Q) Thanks for taking the time to speak with us. Could you walk us through the recent performance of the fund?
A) Thank you for having us. The Super 30 Dynamic Fund has remained consistent with its core philosophy of concentrated smallcap and special-situation investing. As per the latest publicly available disclosures, the fund has delivered 12.05% over 1 year, 8.92% over 2 years, 19.73% over 3 years, and 34.99% over 5 years, as of 30 April 2026.
What we find important is not just the number itself, but what it reflects. This kind of strategy does not move in a straight line.
There are periods when the market rewards patience like last one-month return was 32% for this scheme and periods when it tests it.
Our focus has always been on identifying businesses where the operating setup is improving before the broader market fully recognizes it.
Similar performance was there is other funds as well for example The ‘Impact ESG’ Fund and Green Portfolio ‘Special’ has delivered ~25% and ~24% in the month of April 2026.
In fact, based on the latest PMS Bazaar 5-year CAGR rankings, two of our strategies feature among the Top 5 PMS strategies in India - Super 30 Dynamic Fund is ranked #4 with a 31.64% CAGR, and our Dividend Yield Fund is ranked #5 with a 26.77% CAGR.
Having two strategies in the Top 5 is a significant achievement for us and reflects the consistency of our investment approach over the long term.
We've also seen this consistency carry into more recent performance, for May 2026, PMS Bazaar ranked Super 30 Dynamic 6th and Impact ESG 10th among the Top 10 Equity PMS performers in India.
Q) The Super 30 Fund focuses on turnaround and special situation businesses. What are the key triggers or indicators you look for before investing in such companies?
A) We usually begin with a simple question: is the business temporarily misunderstood, or is it permanently impaired? That distinction matters more than anything else.
Typically, we look for a combination of management credibility, balance-sheet repair, operating improvement, and a visible catalyst over the next 12 to 24 months. In many cases, the story begins when a business is still out of favor, but the worst is already behind it.
That is where we try to be early, while still making sure the downside is contained. And yes, there is no compromise on the quality of fundamentals.
Q) The fund has significantly outperformed the S&P BSE 500 TRI since inception. What would you attribute as the biggest contributor to this alpha generation?
A) Yes, Super 30 since inception CAGR is 25.52% while the same for S&P BSE 500 TRI is 16.40%, since inception i.e. from 17.09.2019. The biggest contributor has been discipline, both in stock selection and in portfolio construction.
In a concentrated strategy like this, alpha does not come from owning too many ideas; it comes from owning the right ones with enough conviction to let the thesis play out.
A second contributor has been our willingness to stay with businesses through periods when the market is not yet ready to reward them. Often, the market waits for proof. By the time proof is visible, part of the rerating has already happened.
Our edge has been in recognizing those inflection points earlier, without losing sight of risk. That does not mean we have not made mistakes, but learning from them is more important than repeating them.
Q) How do you differentiate between a genuine turnaround opportunity and a potential value trap?
A) This is one of the most important parts of our process. A genuine turnaround usually shows some kind of repair already underway, while a value trap often looks cheap only because the business is still deteriorating.
We look for signs that the business is stabilizing in a measurable way, improving revenue trends, better margins, lower leverage, clearer management communication, and evidence that the competitive position is intact.
In practice, the question is not only whether a stock is cheap, but whether the business is becoming better. If the answer is yes, we stay engaged. If the improvement is absent, we move on.
Q) The fund has delivered a nearly 35% CAGR over the past five years, substantially ahead of the benchmark. Do you believe this level of performance is sustainable over the next five years as well?
A) A 35% CAGR over five years is an excellent outcome, but we would be cautious about treating any historical return as a forecast. Markets change, valuations reset, and opportunities evolve as a strategy grows.
What gives us confidence is not a promise of the same number, but the repeatability of the process. We continue to look for underappreciated businesses with improving fundamentals and identifiable catalysts.
If that discipline is maintained, we believe the fund can continue to deliver strong long-term compounding, even if the exact return profile differs from the past.
But if someone expect such performance and then invest, I will definitely call it greed. Don’t forget that the GDP is growing hardly at 7% pa. Also do not forget, in the last 5 years there has been phases of irrational rallies in small-cap space, a contributor to this performance.
Q) The 1-year return performance appears relatively muted compared to the long-term CAGR. Are markets becoming more challenging for special situation investing?
A) Short-term performance often tells a different story from long-term compounding, especially in small-cap and turnaround strategies.
The 1-year return of 12.05% is naturally lower than the multi-year CAGR, but that is not unusual for a style that depends on business cycles, earnings recovery, and rerating.
In some periods, the market rewards momentum and quality more than change. In other periods, it begins to price in recovery.
Our experience has been that special situations require patience because the market rarely gives full credit at the exact moment the business starts improving. That is also where conviction matters most.
The skepticism in the markets towards broader market/ small-caps in last 1 years was something we have never seen before. To me, 12% return in last one year is satisfactory.
Q) Nearly 74% of the portfolio is allocated towards smallcaps. How do you manage liquidity concerns and downside risks within such a strategy?
A) Smallcaps are where inefficiencies are often greatest, but they also require the most respect. Liquidity and downside risk are part of the idea evaluation itself, not something we think about after the fact.
We prefer businesses where the opportunity is large relative to the capital deployed, and where the exit path is not dependent on perfect market conditions.
We also avoid confusing size with safety. The right way to manage small-cap exposure is to size positions carefully, remain selective, and make sure each investment has enough time and room for the thesis to work.
Q) Chemicals and FMEG appear among the fund’s top sectoral allocations currently. What structural opportunities are you seeing in these sectors?
A) Our interest in these areas comes from a mix of cyclical recovery, structural demand, and selective business quality.
In consumer-facing businesses, the opportunity is tied to India’s growing consumption base and gradual premiumization. Strategic Government Support to the import dependent sector like air conditioning, is prominently visible. All the companies are increasing their value addition on a regular basis.
In case of chemical, the sector should do good post FTAs with EU and USA. The FTAs will be game changer for Indian manufacturing and why specifically chemicals - as it is yet to participate in the recent rally. As Warren Buffet says – ‘Be fearful when others are greedy, and be greedy when others are fearful’
Q) If you had to identify one mega trend that could define Indian equities over the next decade, what would it be?
A) If we had to choose one, it would be the broadening of India’s manufacturing and industrial base alongside the formalization of the economy. That theme touches capital goods, chemicals, defense, logistics, engineering, and several other areas where India has the opportunity to build scale over time.
What makes this theme compelling is that it is not dependent on one policy announcement or one market cycle. It is being supported by supply-chain diversification, domestic demand growth, and a gradual shift toward more organized, scalable businesses.
Over the next decade, we believe the market will continue to reward companies that can convert this structural change into sustained earnings power.
(Disclaimer: Recommendations, suggestions, views and opinions given by experts are their own. These do not represent the views of Economic Times)
