Alchemy High Growth- PMS

Investment Objective

The objective is to generate long term returns by investing in equities and equity related instruments, across all market capitalizations with a mid cap bias.

Why Alchemy High Growth?

• India is one of the fastest growing economies with an entrepreneurial pool to exploit opportunities.
• “Top-Down” and “Bottom-Up” approach to stock picking with focus on superior risk-reward.
• The High Growth strategy has outperformed its benchmark in 14 of the total 19 calendar years since 2002
• Has created consistent wealth for investors. An initial investment of Rs. 1 crore in 2002 has grown to Rs. 35 crores as on 31st March 2021.
• A typical portfolio consists maximum of 25 stocks; a minimum of 25% exposure in large-caps, less than 20% in small-cap, and the balance for mid-cap, giving enough flexibility to position the portfolio based on external opportunities and maintaining fair risk-reward.

Terms at a Glance

• CATEGORY - Equity Diversified
• TYPE - Open ended
• BENCHMARK - S&P BSE 500
• SUGGESTED TIME HORIZON - 3 – 5 years
• FUND STYLE - Multi-cap growth
• LAUNCH DATE - 8th May, 2002
• MINIMUM INVESTMENT - Rs.50 lakhs
• OTHER TERMS

  Philosophy & Strategy

  Alchemy Investment Philosophy is “Growth at Reasonable Price”. The philosophy behind growth investing is based on the fact that India is a high growth economy with a strong entrepreneurial culture. Our endeavour is to identify and invest in growth companies through a combination of top-down and bottoms up fundamental research to enable long term wealth creation.

  Description of types of Securities

  Equity

  Basis of selection of types of Securities as part of the Product/Investment Approach

  • Tracking Universe – We have identified a tracking universe of about 180-200 companies based on market capitalisation (above 4000 crores preferably), qualitative governance filters, long term attractiveness and ROE profile of business amongst other parameters.
  • Investible Universe - From this tracking universe, an investible universe of companies is created based on assessment of past and future fundamental variables like revenue and EBIDTA growth, cashflow conversion efficiency and core ROE of the business amongst several other relevant variables which may be unique to a business. In addition to objective fundamental parameters and assessment of qualitative management capabilities, governance standards and competitive ability of the business is also carried out. A comprehensive valuation exercise is also carried out based on one and/or combination of valuation parameters like P/E, P/B. EV/EBIDTA, DCF etc to arrive at an acceptable valuation range for investing in the security.
  • Portfolio Construction – The Portfolio Manager managing the strategy is then free to construct the Clients Portfolio from within the investible universe at his discretion

  Allocation of Portfolio across types of Securities

  Upto 100% in equity (cash portion may be deployed in liquid funds/ debt Securities). The Portfolio allocation across market caps is also given below.

  Portfolio Construct: A typical Portfolio may generally consist maximum of 25 stocks. Indicative Portfolio construct could be as follows:

  Market capitalization*	Portfolio construct
  Large cap stocks	25 – 100%
  Mid cap stocks	0 – 75%
  Small caps	0 – 20%

  *Market capitalization

  Large cap stocks	Market capitalization of 100th stock is the cut off for large cap
  Mid cap stocks	Market capitalization between 101st to 400th stock is the cut off for Mid cap
  Small cap stocks	Market capitalization below 400th

  Note: Market capitalization cut off will be taken from S&P BSE 500 as on 31st Dec (i.e. end of every calendar year) for succeeding calendar year.

  Basis for choice of benchmark

  S&P BSE 500 index serves as a comprehensive representation of the Indian economy, covering all 20 major sectors in the country. The index comprises of the top 500 companies listed on the Bombay Stock Exchange, with selection based on a combination of average float-adjusted market capitalization, average value traded, and average total market capitalization. Hence, we believe S&P BSE 500 is the appropriate benchmark which would reflect the realistic comparison with the Portfolio performance.

  Risk associated with Product/Investment Approach

  High Risk

  • General risk
    Please refer “Risk Factors” given in clause 6 of the Disclosure Document
  • Specific risk
    The Portfolio Manager doesn’t envisage any specific risks in addition to General Risk factors

  Other salient features, if any

  NA

Fund Manager – Amit Nadekar

A Chartered Accountant by profession, Mr. Nadekar has worked across equity research, corporate strategy, taxation and audit over the last one and a half decades. He started his career on the sell side, tracking the US banking & financial sector; later moving on to the corporate side as a part of the Corporate Strategy team at Raymond. He has been a part of the Alchemy investment team since 2005.