November 21, 2025
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Samco Mutual Fund has launched its latest New Fund Offer at a time when Indian equity markets are displaying strong resilience despite global volatility. To understand the strategy, risk management framework, sector opportunities and valuation discipline behind this NFO, Chanakya Ni Pothi presents an exclusive conversation with Mr. Viraj Gandhi, CEO – Samco Mutual Fund. An MBA in Capital Markets from NMIMS and former BFSI analyst with ICICI Securities and ASK Investments, Mr. Gandhi brings deep research-driven insights into portfolio construction and market cycles.
— By Jainee Shah, Director, Chanakya Mediahouse Pvt. Ltd., SEBI Registered Research Analyst & Chartered Accountant
1️⃣ Your new NFO is launching at a time when midcaps/smallcaps are showing both strong momentum and elevated valuations. How does Samco evaluate “margin of safety” in today’s overheated pockets, and what valuation discipline will the fund follow to avoid cyclic traps?
Samco evaluates margin of safety through its proprietary Equity Margin of Safety Index (EMOSI), which objectively measures the reward-to-risk environment across markets. EMOSI ranges from 0–200, and readings above 100 indicate favourable conditions for long-term investors. With the current EMoSI level hovering around 103–105, the broader market still offers a healthy margin of safety despite pockets of elevated valuations. Coupled with the meaningful correction seen across momentum-oriented indices over the last year, the setup today is significantly more attractive. For investors building a minimum 5 -year small-cap allocation, adding a momentum-driven sleeve through the SAMCO Small Cap Fund provides a disciplined, evidence-backed way to avoid cyclic traps and capture durable trends.
2️⃣ You specialise in BFSI research. How will your sector expertise influence portfolio construction? Do you see structural alpha emerging from NBFCs, PSU banks, digital lenders or insurance in the coming 3–5 years?
While I specialise in BFSI research, Samco MF’s investing framework is entirely tech-enabled and rule-based, with zero human discretion on stock selection, sizing, or exits. Our algorithms—back-tested over 20 years—drive portfolio construction objectively, eliminating bias and emotion. Sectors like NBFCs, PSU banks, digital lenders and insurance offer strong structural tailwinds over the next 3–5 years, but they enter the portfolio only when they demonstrate sustained momentum and our models trigger a buy signal. This ensures participation in long-term opportunities, but always through a disciplined, evidence-led process.
3️⃣ Samco is known for its “Stress-Tested Investing” philosophy. How will this NFO implement downside protection during sharp corrections, especially when liquidity-driven rallies reverse?
The SAMCO Small Cap Fund applies our Stress-Tested Investing framework by pairing momentum—the most consistent long-term alpha factor—with disciplined risk controls. While no strategy can deliver full upside without any downside, our momentum approach naturally cuts weaker names and rotates into strength, reducing drawdown intensity during reversals. The fund also maintains a quality bias and the flexibility to hold up to 20% in mid-caps, which can be hedged in sharp corrections. Over two decades, momentum in small caps has proven its edge, with the Nifty Smallcap250 Momentum Quality 100 Index outperforming the benchmark by ~6% CAGR and tripling wealth—making this style highly relevant in today’s market.
4️⃣ With retail SIP flows at all-time highs, how do you address the behavioural risks of investors chasing short-term returns? What role will Samco MF play in building long-term discipline, particularly in volatile segments?
Behavioural discipline is as important as product design, which is why Samco MF focuses heavily on clear communication and right expectation-setting—especially in volatile segments like small caps. We encourage investors to come in with a minimum 5-year horizon, avoiding the trap of chasing short-term returns. To support this, we’ve issued a detailed Guidance Note to partners, recommending that only 20% of a client’s small-cap allocation be placed in a momentum strategy. This keeps emotions in check while meaningfully improving the portfolio’s consistency, return profile and Sharpe ratio. Samco’s role is to help investors stay disciplined, not just invested.
5️⃣ Indian markets are diverging from global cues; while global tech and US indices correct sharply, India remains resilient. Do you expect this decoupling to sustain, and how does this macro view shape your strategy for the NFO?
While global markets may be correcting, India’s relative resilience is an observation—not a forecast we base decisions on. At Samco, we deliberately avoid making macro calls or reacting emotionally to short-term divergences. Our NFO will follow the same rule-based, algorithm-driven framework, which responds only to data and market-validated momentum signals. This ensures we participate in emerging trends—whether India continues to decouple or not—without letting bias, narratives or predictions influence portfolio construction.