Finance
Accuracap Alpha 10 PMS: Investment Philosophy, Quantitative Framework & Portfolio Strategy
Accuracap Alpha 10 PMS
Accuracap follows a diversified long-only Portfolio Management Services (PMS) strategy focused on combining business fundamentals, valuation analysis, momentum, and risk management using a proprietary investment framework.
The firm offers multiple focused equity strategies across:
- large cap
- mid cap
- small cap
- micro cap
- multicap portfolios
The investment process combines:
- quantitative ranking models
- business quality assessment
- risk management
- long-term investing discipline
Executive Summary
Company Overview
- Started as a Family Office in 2009 to manage proprietary funds
- Based out of New Delhi
- Managing public funds since 2011
Product Overview
- Diversified long-only PMS strategies
- Four focused schemes:
- Large Cap
- Mid & Small Cap
- Micro Cap
- MultiCap
- Stock selection based on:
- fundamental parameters
- technical parameters
- proprietary ranking algorithms developed over 10 years
Performance Overview
- Schemes have outperformed benchmarks and comparable funds across multiple periods
- Strong risk-adjusted returns as referenced in Morningstar studies
Management & Pedigree
- Founders and senior management include:
- business executives
- computer scientists
- Leadership experience includes managing businesses at Adobe, a Fortune 500 company
Portfolio Philosophy Based on Deep Science
The investment framework combines business quality analysis with quantitative ranking systems and disciplined portfolio construction.
Investment Objective
- Build diversified portfolios of approximately 12–35 high-quality companies
- Focus on long-term wealth creation through disciplined investing
Intelligent Ranking Algorithm
Proprietary Investment Framework
- Stock selection based on proprietary ranking algorithms
- Back-tested using data from January 1, 1999
- Deployed in live markets since 2009
Key Inputs in Ranking
The framework combines:
- business growth
- valuation
- stock price momentum
- risk control mechanisms
Valuation Analysis
The model evaluates valuation relative to:
- broader market universe
- peer groups
- historical valuation trends
Focus on Business Fundamentals
Core Business Parameters
- Long-term earnings trends
- Strength of balance sheet
- Business quality assessment
Risk Management Framework
The investment process evaluates:
- promoter risk
- business growth risk
- solvency risk
- liquidity risk
Investment Process
Stage One: Core Earnings
Stage Two: Factors for Model Ranking
Growth Parameters
- Revenue growth
- Core earnings growth
- Cash flow growth
- 20-quarter trend analysis
- Seasonality-adjusted analysis
Core Strength & Risk Parameters
- Margin trend analysis
- Return on Capital Employed (ROCE)
- Balance sheet strength
- Solvency and liquidity analysis
- Cash flow versus earnings analysis
- Return on marginal invested capital
- Stock price momentum across:
- short term
- medium term
- long term
Valuation Comparison Framework
Valuation is assessed relative to:
- overall investment universe
- peer groups
- historical ranges
Stage Three: Portfolio Construction
Disciplined Approach to Portfolio Management
What the Strategy Does
- Maintains largely fully invested portfolios
- No attempts to time the market
- Portfolio rebalanced based on stock rankings
- Stocks exit the portfolio if rankings fall below cut-off levels
- Lower-ranked stocks replaced with higher-ranked opportunities
What the Strategy Avoids
- Short-term trading
- Derivatives or leverage
- Relationship-driven investing
- Investment based on market rumors or tips
- Public sector company investments
- Fad or momentum sectors
- IPO investing
Summary: Investment Philosophy & Process
Y-o-Y Returns – Net of Expenses & Fees
As on 29th Feb 2024
Absolute Returns – Net of Expenses & Fees
As on 29th Feb 2024
Quartile Analysis by APMI
As on 29th Feb 2024
Three-Year Rolling Returns – PicoPower & Alpha10
Quarterly Returns – PicoPower
Comparison with Peer Mutual Funds – PicoPower
Quarterly Returns – Alpha10
Comparison with Peer Mutual Funds – Alpha10
Quarterly Returns – AlphaGen
Comparison with Peer Mutual Funds – AlphaGen
Quarterly Returns – Dynamo
Comparison with Peer Mutual Funds – Dynamo
Some Big Winners – PicoPower
Some Big Winners – Alpha10
Some Big Winners – Dynamo
PicoPower – Top of the Charts on Multiple Parameters
- “Compared with the benchmark, the strategy outperforms both in terms of risk and return. Meaning, Pico Power not only assumes a lower level of risk, but also manages to outperform the benchmark at this risk level.”
- “It has not only outperformed the average peer in all trailing periods, but has beaten the top performer in most periods” - Morningstar
Alpha10 – Top of the Charts on Multiple Parameters
- “On the trailing returns front, it has not only outperformed over the long term, but has also delivered superior returns over longer time frames”
Fund Terms
Portfolio Offerings
- PICOPOWER
- ALPHAGEN
- ALPHA10
- DYNAMO
Type of Offering
Discretionary Portfolio Management Service (PMS) – Equity
Portfolio Manager / Advisor
Accuracap Consultancy Services Pvt. Ltd.
Benchmark
NIFTY 50 TRI for Alpha10
Fee Structure
A) Fixed Fee Option
- Fixed Fee: 2.5% p.a.
B) Profit Sharing Option
Fixed Fee
- 1.5% p.a.
Incentive Fee
- 20% of excess returns generated over hurdle rate
- Charged at end of every financial year
- Calculated on high water mark basis
Hurdle Rates
- 10% for Alpha10
- 12% for PicoPower and AlphaGen
- 14% for Dynamo
Other Charges
Applicable statutory and operational charges including:
- STT
- Demat Charges
- Service Tax
- Custodial Charges
Exit Load
Before Completion of 1 Year
- 2% of current investment value
After 1 Year but Before Completion of 2 Years
- 1% of current investment value
After Completion of 2 Years
- Nil
Frequently Asked Questions (FAQs)
What is Accuracap Alpha10 PMS?
Accuracap Alpha10 PMS is a discretionary portfolio management strategy focused on long-term equity investing using quantitative and fundamental investment frameworks.
What investment methodology does Accuracap follow?
The investment strategy combines:
- proprietary ranking algorithms
- valuation analysis
- earnings quality assessment
- momentum analysis
- risk management
What are the portfolio offerings under Accuracap PMS?
The PMS offerings include:
- PICOPOWER
- ALPHAGEN
- ALPHA10
- DYNAMO
Does the strategy use leverage or derivatives?
No. The strategy avoids:
- leverage
- derivatives
- speculative investing approaches
How are stocks selected in the portfolio?
Stocks are selected using proprietary quantitative ranking systems combined with business quality and valuation analysis.
What benchmark is used for Alpha10?
The benchmark used is the NIFTY 50 TRI.
Final Thoughts
Accuracap Alpha10 PMS combines:
- quantitative investing
- business fundamentals
- disciplined portfolio construction
- valuation analysis
- risk management
The strategy focuses on long-term investing through systematic stock selection and diversified portfolio management.
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