ASK Absolute Return Fund

The ASK Absolute Return Fund aims to deliver absolute returns over a medium term, with a lower degree of volatility compared to broader Indian equity indices. It seeks to generate consistent risk-adjusted returns with an alpha of 100-150 bps (net of fees and tax) over liquid fixed income alternatives, with a 12+ month investment horizon. The fund prioritizes low volatility, fewer drawdowns, and capital preservation, irrespective of market conditions.

The ASK Absolute Return Fund is built on a philosophy of focusing on innovative strategies by extensively using derivatives along with other alternative investments, combined with a strong risk management framework. They believe in capital preservation irrespective of market conditions. Their strategy emphasizes delivering positive absolute returns through active and dynamic portfolio management, where they take both long and short positions in stocks and indices. They utilize fundamental, technical and quantitative analysis along with proprietary research and strategies to determine their portfolio positions. They emphasize a constant quest to improve outcomes while avoiding excessive risk.

The key features are:

1. Absolute Return Focus: The fund focuses on generating consistent, positive returns regardless of the broader market movements, rather than merely outperforming a benchmark index.
2. Capital Preservation: It aims to protect the investor’s capital while delivering attractive returns, especially in volatile or bearish market conditions.
3. Diversified Investment Strategy: The fund seeks to invest across a variety of asset classes including equity, debt, and derivatives, with the flexibility to adapt the portfolio based on market opportunities.
4. Risk Mitigation: A major objective is to minimize downside risk, with a balanced approach to investing in high-return opportunities while mitigating potential losses.
5. Medium to Long-Term Horizon: The fund generally looks to capitalize on both short-term market opportunities and longer-term growth trends.

ASK Absolute Return fund’s investment strategy involves a dynamic deployment of capital by taking long and short positions in stocks and indices. It utilizes a combination of fundamental, technical, quantitative, and derivative analysis along with special situation investment ideas and tactical moves. The investment process starts with a top-down overlay of global and domestic macro views including looking at global growth, interest rates, currencies, commodities and flows. It then moves towards a bottom up approach based on fundamental analysis and sector and stock views, and looks to build a diversified and balanced portfolio. The process also includes a robust framework to evaluate management, their quality and earnings projections, and factors regulatory and governance risks into decision making. The portfolio is constructed using a quant-based approach that is supplemented with technical and derivative analysis. The fund uses a combination of relative and absolute short calls and also protects the portfolio using index puts and short single stock positions.