Alchemy Smart Alpha 250: Where Quant Meets Active Management

The new-age investment world calls for strategies that go beyond traditional approaches. Alchemy Smart Alpha 250 PMS strategy is an offering that combines quantitative analysis and active portfolio management. Designed for investors focusing on high-risk, high-reward, this large-and-mid-cap focused strategy aims to deliver superior long-term, risk-adjusted returns and achieve consistent alpha generation over time.

With a minimum investment of INR 50 lakhs and designed with an investment horizon of 3-5 years, it is suitable for those investors committed to wealth creation over the long-term. Alchemy Smart Alpha 250 capitalizes on the accumulated expertise of its fund manager while leveraging the precision of data-driven insights. This balanced approach enables investors to minimize biases, adapt to market conditions, and maximize potential growth opportunities.

Investment Philosophy

Alchemy Smart Alpha 250 employs a high-risk, high-reward strategy, which aims at generating long-term consistent alpha by majority investing in large and mid-cap companies using objective, back tested and data-driven approaches based on various parameters such as growth, valuation, quality earning, and balance sheet health.

What Sets Alchemy Smart Alpha 250 Apart?

1. Strategy Approach:

Alchemy Smart Alpha 250 distinguishes itself by blending Quant and Active portfolio management. This hybrid model ensures that the strategy benefits from:

• Expert Insights: Decades of fund management experience provide a nuanced understanding of market trends.
• Quantitative Rigor: Back-tested and objective methodologies drive unbiased and data-backed decision-making.
• Market Coverage: The large-cap and mid-cap universe, accounting for 80% of India’s total market capitalization of all listed companies on NSE & BSE (as of December 2024), offers the best of both: Where large-caps help reduce the impact on the portfolio during volatility, while mid-caps aim to offer superior growth potential.

2. Auto adaptive to changing market cycles:

Instead of having a fixated style bias, the fund is capable of dynamically adapting to the changing market cycles by giving more weightage to relevant factors basis the strength of market environment.

3. 25 Stock Portfolio:

It is a fairly concentrated portfolio of 25 stocks.

4. No Cash Calls:

The strategy does not take cash calls; it is usually almost fully invested.

The eQGP Framework

Central to this strategy is the eQGP framework, which tailors investment decisions based on both the strength of the market and the company.

1. e (Environment):

The philosophy of the product is to get aggressive in a risk-on environment and defensive in a risk-off environment. The rating band on the environment is based on multiple factors. A few of them are liquidity conditions in the market, interest rate conditions in the market, and improving or deteriorating macro growth.

2. Q (Quality):

The quality of a business comes from multiple attributes. The higher the number of these attributes in favour, the higher the quality. Capital efficiency - absolute & relative, Leverage ratios - absolute & relative, EVA generation track record, and OCF generation track record are some of the factors on which the quality ratings are based.

3. G (Growth):

All good things in the company need to culminate into business growth. Our growth rating band is based on multiple factors. A few of them are: Profit growth - absolute and relative and operating efficiency - absolute and relative.

4. P (Price Action):

Returns come from price action and movement. The price action rating band is based on multiple factors. A few of them are: Tailwinds in the price behaviour - absolute and relative, ownership trends, and consistency of outperformance.

Dynamic Weightage Application

The framework adjusts its focus dynamically: In risk-on environments, the emphasis is on price action, followed by growth and quality. In risk-off environments, quality takes precedence, ensuring the portfolio’s resilience. This adaptive strategy ensures optimal portfolio alignment with prevailing market conditions.

Key Portfolio Features

1. Composition:

The portfolio comprises the top 25 companies with the highest composite scores from the eQGP framework. These stocks are rebalanced periodically to align with evolving market conditions.

2. Benchmark Agnostic:

Alchemy Smart Alpha 250 does not restrict itself to stock or sector weightings. This approach allows for greater flexibility and a focus on generating alpha.

3. Allocation:

Equity: Up to 100% allocation, with cash portions deployed in liquid funds or debt securities as needed.

4. Diversification:

Predominantly invested in large- and mid-cap stocks to balance growth and stability.

The Fund Manager - Alok Agarwal

Alchemy Smart Alpha 250 benefits from the leadership of Alok Agarwal, with an experience of over two decades of equity fund management experience. Having joined Alchemy in 2022, Alok brings a wealth of expertise from his tenure at PGIM India AMC, where he led flagship funds and offshore equity desks. His credentials include CA, CFA, and CMT certifications, along with a Master’s in Commerce and Finance.

Alchemy Capital Management - PMS Providers in India

By leveraging its research-driven approach and active management, Alchemy Capital Management continues to identify and capitalize on high-growth opportunities, providing investors with an attractive avenue for long-term capital appreciation.

Backed by the eQGP framework and dynamic portfolio management, Alchemy Smart Alpha 250 is equipped to navigate market complexities, that aim to deliver consistent alpha. Investors seeking a robust, data-driven, and actively managed strategy, can connect with us to know more about Alchemy Smart Alpha 250.
 

Disclaimer:
This blog is for informational purposes only and should not be considered as an offer or solicitation to buy or sell any securities or make any investments. We recommend readers to take independent advice before taking any investment decisions. Please refer to our Disclaimer and Disclosures for more details.