Portfolio
Management
Project
Investment Philosophy Submission
For Dr. Mayank Joshipura’s IAPM Course
Submitted By-
Group 11, IAPM B
Vaibhav Phaltankar H045
Samarth Tripathi J062
Agrima Tiwari H060
Anurag H001
Abhishek Goyal H021
Arjun Balaji H011
Investment Philosophy
Introduction -
Most of us look for instant gratification even in our investments. However, true, sustainable
wealth generation happens by staying put- by waiting for the grass to grow under our feet. It
is this philosophy that drives our investments- from its construction to the management. It
involves picking the right stocks in the first place- an arid piece of land shall not grow any
grass, no matter how long you sit there. Once the right stocks are picked, it is essential that
we stay put and remain committed to the conviction that rides on our analysis behind picking
these stocks.
In this document, we shall outline our mechanism to build your ideal portfolio and chart the
goals we attempt to achieve.
Pick the right land and wait for the grass to grow under your feet.
Investment Style:
To make an informed decision and pick up attractively priced stocks, we have defined the
investment style that shall permeate all our investment decisions. For us, a two-pronged
approach to a decision is the tried-and-tested recipe for success.
Value Growth
Investing Investing Success
When we talk of value investing, we are essentially talking of a stock most players deem to be
an underdog- stocks that seem to be trading for a price lower than their intrinsic value. Since
human beings behave irrationally, markets are believed to overreact to a piece of news about
said stock, and therefore, is not in line with its fundamentals. Warren Buffet remains a staunch
proponent for this philosophy. The ultimate aim is to make your money work for you, as
opposed to you working for money. To this effect, the growth philosophy aims at increasing
your capital. The forward-looking exercise aims on capitalizing on the future benefits set to
accrue to stocks that make them look attractive.
With these two styles, our focus shall remain on large-cap and mid-cap stocks so as to deliver
maximum value to our investors and minimize shock values.
Investment details
Asset Allocation 75% in own fund, 25% in other fund(s)
Benchmark Nifty 200 Index
Management Management Fee @1% of AUM + 10% of returns in excess of
Fee the Benchmark
Security screening process
Quantitative factors
• Revenue and Net Income growth
• Operating and net profit ratios
• Leverage ratios
• Valuation ratios
• Dividend stream
Qualitative factors: To ensure quality, we are going to evaluate the following factors:
1. Business Strength: It is reflected by the strength of the economic moat enjoyed by
the company as reflected by the sustainability of the competitive advantage, stability
of operating margins (over a full business cycle), stability of returns on invested
capital. Apart from these indicators of economic moat, in the post-pandemic scenario
company’s performance on the ESG factors has proven to be a vital metric in
evaluating business strength.
2. Financial Strength: It can be evaluated by thoroughly studying the financial
statements to gauge the consistency of the fundamental performance from factors
like operating efficiency, cash flow generation ability, debt repayments, positive free
cash flows, and increasing current ratio. Further to ensure the authenticity of the
financial statements, Monteir’s C score will be used.
Portfolio reconstruction
We aim to pick securities from multiple sectors to diversify the portfolio and reduce the risk.
Assets that are unwanted and are not performing well might be replaced with preferred
assets based on the performance, market conditions and to align the portfolio with our
investment philosophy and return targets.
Rebalancing approach
We will be realigning the weights of our portfolio periodically by buying and selling the assets
in our portfolio to maintain the desired level of asset allocation. This will help the investors by
decreasing the exposure to undesirable risks. When the investor’s tolerance for risk has
changed, rebalancing will readjust the weights of the selected securities in the portfolio.
