Mutual funds are for low beta returns, and PMS(s) are for high beta, so, it’s important to stick to the BEST products.
Firstly, Equity Mutual Funds are great investment products for Young and Old investors with a horizon of more than 5 years. One can save small amounts every month by SIPs. Over a period of time, consistent saving and yearly compounding grow the savings to a large sum.
However, for lump sum investments, stock investing by way of PMS is equally good and has a potential for high returns, because this is a more concentrated and focussed approach to investing provided one stick to the BEST.
Here, we’ve covered details of Top 5 PMS products for the next 5 years:
1.Ambit Coffee Can
This PMS strategy is actually a low-risk route to very high returns. This strategy is to identify only the “THE GREAT COMPANIES”, that have the DNA to sustain their Competitive Advantages over 10, 20, 30 years (or longer). It selects companies which have decades of experience, strong brand value, and competitive advantage. These great companies endure difficult economic conditions and do not get disrupted by competitors or by evolution in customers’ preferences, nor by operational aspects of the business.
So, these companies are least affected by the change in the stock market. During the difficult times, they might have to increase the prices but it won’t affect them. For instance, if ITC increases the prices of cigarettes, people won’t stop buying them because of an increase in price. Similar strengths are shown by Asian Paints. Likewise, HDFC Bank, Britannia, Marico, Nestle.
Excel below provides the Average Year on year Return on Equity for past 20 years
| RETURN ON EQUITY (Yearly) | Average FY 98-08 | Average FY 09-18 |
| Asian Paints | 32% | 38% |
| ITC | 30% | 30% |
| Nestle India | 65% | 71% |
| Pidilite | 25% | 27% |
| Page Industries | 38% | 52% |
| HDFC Bank | 21% | 19% |
| Median | 31% | 34% |
| Cost of Equity | 15% | 15% |
| Source – Companies, Ace Equity |
AMBIT – THE TEAM
Mr. Manish Jain, CFA – Portfolio Manager
Manish Jain has over 15 years of experience in equity research. Before moving to Ambit Asset Management, he worked with Nomura for a decade as a Lead Analyst covering FMCG, electrical durable and retail. He has consistently been voted as the best performing analyst in the research team for the past four years by ADIA, Capital World; Capital International for strong corporate access amongst others. Manish is a Chartered Financial Analyst (USA) and holds an MBA in Finance from Symbiosis Centre for Management and Human Resource Development, Pune.
Mr. Siddhartha Rastogi
Siddhartha has been with Ambit for over 8 Years.
Before joining Ambit, Siddhartha cofounded IIFL Private Wealth and set up the mutual fund and structured product distribution business IIFL.
He is an Honors Graduate in Commerce from Delhi University, Company Secretary (Intermediate) and has a PGDM from NMIMS, Mumbai.
2. IIFL Multicap Advantage
IIFL Multicap Advantage is a Low Beta PMS with an inbuilt PUT option. It is a strategy run by IIFL Asset Management company, a subsidiary of IIFL Wealth Management Ltd. The company manages over USD 1bn of assets overall. This is first of its kind strategy in the PMS industry. It picks 15-20 high quality companies having low leverage and offers high margin of safety. It aims to generate significant Alpha with very low risk (beta of 0.7 to 0.8 for past portfolios, lower than that of a mutual fund)
The portfolio construct invests 94% in Equities and 6% in PUT option at the money. The portfolio manager buys European year PUT options further linked to the valuations to optimize returns and lower the hedging costs. The portfolio strategy talks about 2 main aspects which the investors look for while investing in equity markets –
1.Maximize the upside – It invests in themes that is expected to capitalize on the exponential acceleration in the economy
2. Protect the downside – It protects the downside by investing in PUT Option which serves as a hedge against any market crash.
IIFL – THE TEAM
Anup Maheshwari, Jt CEO and CIO
Anup Maheshwari is Joint – Chief Executive Officer and Chief Investment Officer. An alumnus of Indian Institute of Management, Lucknow, he has over 24 years of work experience in the financial services sector. Prior to joining IIFL Asset Management Limited, he has been associated with DSP Investment Managers Private Limited for over 21 years as an Executive Vice President & Chief Investment Officer. Anup was also Chief Investment Officer at HSBC Asset Management between December 2005 and May 2006 before returning to DSP Investment Managers.
Aniruddha Sarkar – Portfolio Manager
Aniruddha Sarkar has over a decade of experience in the Financial Services sector having worked both on the sell side and buy side. He has been with IIFL Wealth Group now for over 8 years and has been involved in identifying investment ideas across various sectors and market-caps that can generate alpha for the investors. He has been one of the key members involved in setting up the entire equity advisory desk at IIFL Wealth. Prior to working with IIFL, he was working with a UK based hedge fund. He holds an MBA in Finance from IMI, New Delhi and a Bachelor’s degree in Commerce from St. Xavier’s College, Calcutta.
3.Invesco D.A.W.N
D.A.W.N stands for – D – Demand Recovery across cyclical & consumer discretionary sectors, A – Attractive valuation to provide margin of safety, W – Winning companies on the cusp of a new demand cycle leading to operating & financial leverage efficiencies, N – New credit & investment cycle to provide a boost to earnings recovery.
Invesco is one of the world’s leading independent global Investment Management Firm. It manages USD 980.9 billion in assets under management around the globe with an average asset base of over INR 36,088.99 crores (USD 5.15 bn, as on Dec 18) (for the quarter ending December 2018). Its value lies in “Investors First” Philosophy, Focus and commitment to helping clients pursue their financial goals. It has Portfolio managers, analysts
Main highlights of the Investment Strategy are –
–Exposure to sectors and stocks which are expected to benefit from a revival in the cyclical recovery.
–Emphasis on mean reversion & value style. The high impetus on –companies with quality business models & management.
–Allocation to companies which exhibit operating & financial leverage.
–Bottom-up stock picking approach without bias towards market cap or sector.
INVESCO – THE TEAM
Mr. Taher Badshah – Chief Investment Officer (Equities)
Taher has over 23 years’
Mr. Amit Nigam – Fund Manager
Amit has over 17 years’ experience in the Indian equity market. In his last assignment, Amit was working with Essel Mutual Fund as Head of Equities where he was responsible for the equity management function at the firm. Amit holds a Mechanical Engineering Degree from Indian Institute of Technology Roorkee and a PGDBM from Indian Institute of Management, Indore.
4.Motilal Oswal Next Trillion Dollar Opportunities Portfolio (NTDOP)
Motilal Oswal is amongst India’s leading PMS providers, with Assets under Management of approx Rs. 14,754 Crores and trusted by over 41,360 HNI investors. Overall PMS track record of over 15 years since its inception in 2003. Its NTDOP Strategy has consistently outperformed the benchmark across market cycles over last 10 years. Around 8,134 Crores is being managed under NTDOP strategy.
NTDOP strategy aims to deliver superior returns by investing in stocks from sectors that can benefit from the Next Trillion Dollar GDP growth. It aims to predominantly invest in Small and Mid cap with a focus on identifying potential winners that would participate in successive phases of GDP growth. Some of the key parameters of its investment philosophy are as follows –
–High Growth Stories: Sectors and companies for higher than average growth.
–Reasonable Valuation: Invest in high growth companies at reasonable price/value.
–Emerging Themes: Focus on Identifying Emerging Stocks/Sectors.
–Buy and Hold Strategy: The Portfolio shall focus on above philosophies and hold positions till value crystallization.
MOTILAL OSWAL – THE TEAM
Mr. Raamdeo Agrawal – Co-Founder
Mr. Raamdeo Agrawal is the Co-founder, Joint Managing Director of Motilal Oswal Financial Services Limited and Chairman of Motilal Oswal Asset Management Company Ltd. He is the brain behind the “
He has been authoring the annual Motilal Oswal Wealth Creation Study since its inception in 1996. He has also authored the book “The Art of Wealth Creation” which compiles insights from 22 “Wealth Creation Studies”. He has been awarded the Rashtriya Samman Patra by Central Board of Direct Taxes for a consistent track record of
Mr. Manish Sonthalia – Associate Director and Head Portfolio Management Services (PMS)
Mr. Manish Sonthalia heads the Equity PMS at Motilal Oswal Asset Management Company Ltd. He also serves as the Chief Investment Officer and the Director of the Motilal Oswal India Fund. He has over 25 years of experience across equity fund management and research covering Indian markets and has been with Motilal Oswal for over 13 years. He holds a Bachelor Degree in Commerce (Hons), ICWAI, CS, MBA-Finance, FCA He has authored a paper ‘A Rising Consumer Class’ on Indian markets, published by the Global World Economic Forum in 2010.
5.ASK Indian Entrepreneur Portfolio (IEP)
ASK Investment Managers aim at creating long-term sustained wealth for its investors, short-term volatility notwithstanding. Our suite of offerings is basically derived from our investment approach based on imbuing our five key investment attributes: Size of opportunity, quality of business, management quality, earnings growth, and value. Quality of management is a qualitative attribute, while the other four are quantitative, and its threshold for clearance is kept at the ‘highest’ level. ASK IEP Strategy manages around 6,804 Crores of assets.
The concept invests into Indian Entrepreneurs with adequate skin in the game who have demonstrated high standards of governance, vision, execution, wisdom, capital allocation and capital distribution skills. They run businesses that are amongst the highest long-term earnings growth. Key highlights of its philosophy are –
—
—
—
–Size of opportunity remains at a high enough level and growing
ASK Investment Managers– THE TEAM
Mr. Bharat Shah – Executive Director
Mr. Bharat Shah is the Executive Director of the Company. He holds a bachelor’s degree in commerce from the University of Bombay and a post-graduate diploma in management from the Indian Institute of Management, Calcutta. He has been on the Board since 2008. He has over 24 years of experience in the field of investment management and has previously worked at Birla Capital International AMC Limited and Asian Paints (India) Limited
Mr. Sumit Jain – Senior Portfolio Manager
Mr. Jain has over 12 years of total experience and has been working with ASK Investment Managers for the last 11 years. He has been managing the Indian Entrepreneur Portfolio strategy since inception. The fund has grown to upwards of INR 5000 crores over last 7 years. He is also engaged in research of business within ASKIM universe, identifying new investment opportunities and tracking their performance at regular intervals. He is a Post Graduate in Management from Mumbai University.
Hence, one must have an in-depth knowledge of the PMS product they’re going to invest in and should also be aware of the type of orientations of equity investments.
Disclaimer:Investments are subject to market risk. This write up is issued by pms-aif.com and is produced for information purposes only. Information and opinion contained in this document are published only for the assistance of the recipient. It is neither a solicitation to sell nor shall it form the basis. Or be relied upon in connection with any contract or commitment whatsoever or be taken as investment advice.
