Alchemy Ascent Strategy: Investment Philosophy, Data-Driven Framework & Portfolio Approach
Alchemy Ascent Strategy
Alchemy Ascent is a high-risk high-return oriented investment strategy focused on generating long-term risk-adjusted returns through a research-driven and data-intensive investment process.
The strategy combines:
- quantitative research
- stock ranking systems
- capital allocation
- risk management
- portfolio optimization
The portfolio aims to identify companies using parameters such as:
- growth
- valuation
- quality of earnings
- balance sheet health
Alchemy Ascent – The Strategy
Investment Objective
To generate long-term risk-adjusted returns.
Philosophy & Strategy
Alchemy Ascent follows a:
- high-risk high-return investment approach
- research-driven stock selection framework
- data-intensive investment methodology
The strategy focuses on:
- capital allocation
- stock selection
- portfolio optimization
- risk controls
The investment framework seeks to identify businesses using:
- growth parameters
- valuation analysis
- earnings quality
- balance sheet strength
Fund Management
- Fund Manager: Alok Agarwal (From 1 Oct 2023)
- Co-Fund Manager: Deven Ved (From 1 Oct 2023)
Type of Securities
- Equity
Basis of Security Selection
Equity investments are selected based on:
- Company fundamentals reflected in reported financial numbers
- Investment strategy research across market cycles
- Risk and reward analysis
Cash or cash equivalents may be held when suitable equity opportunities are unavailable.
Benchmark
- S&P BSE 500 TRI
Basis for Benchmark Selection
As per APMI Circular APMI/2022-23/02 dated March 23, 2023.
Portfolio Allocation
- Up to 100% allocation in equities
- Cash portion may be invested in:
- liquid funds
- debt securities
Portfolio Construction
- Typically holds 25–30 stocks across sectors
Investment Horizon
- 3 to 5 years
Risk Profile
- High Risk
Investment Approach
In the investment ecosystem, identifying the “right stock,” “right sector,” and “right market cycle” is often considered essential.
Alchemy Ascent emphasizes that:
- stock allocation
- relative portfolio ranking
- timing
- risk management
are equally important contributors to alpha generation.
The strategy follows:
- disciplined investing
- data-driven research
- objective decision-making
- systematic investing
The framework aims to minimize:
- emotional bias
- greed
- fear
- hope-driven investing
Alchemy Ascent seeks to deliver long-term outperformance through:
- objective analysis
- back-tested models
- systematic portfolio construction
Alchemy Ascent – What, Why & How
Investment Process
Stock Selection
- Market capitalization cut-off: INR 4,000 Crores
- Stocks pass through multiple filters eliminating value-destroying factors
- Additional risk and forensic analysis may veto investments
- More than 50 quantified fundamental parameters used for screening
- Highest-ranked stocks selected for investment consideration
Capital Allocation
- Portfolio generally holds 25–30 stocks
- Typical stock weight ranges between 3%–6% at cost
- Exceptional stocks may receive allocation up to 10% at cost
- Ranking system determines:
- stock inclusion
- portfolio allocation
Risk Management
A. Prohibitive Risk Controls
- Quality filters
- Negative scoring for unfavorable balance sheet parameters
B. Participative Risk / Exit Strategy
- Daily change in stock ranking and score
- Drawdown analysis
- CAGR underperformance checks
- Rule-based exit systems
C. Operational Risk
- Operational risk minimized through automation
Alchemy Ascent Back-Tested Performance
Return, Risk and Period Analysis
Period: 01 January 1997 – 31 December 2018
Alchemy Ascent Back-Tested Rolling Returns
Five-Year Rolling Returns
Period: 01 January 1997 – 31 December 2018
Cash Level vs Benchmark
Portfolio Started: 01 January 1997 – 31 December 2018
Alchemy Ascent – Five-Year CAGR Returns for Different Start Dates
Five-Year CAGR Analysis
- Different start dates represent different market cycles
- Includes:
- market tops
- market bottoms
- yearly starting periods since 1997
Near Market Top
Represents dates between a market top and three months earlier.
Near Market Bottom
Represents dates between a market bottom and three months earlier.
Multiple
Calculated as:
- Ascent Returns ÷ BSE 200 Returns
Alchemy Ascent – Three-Year CAGR Returns for Different Start Dates
Three-Year CAGR Analysis
Different start dates represent:
- market cycles
- yearly starting points since 1997
Near Market Top
Tests vulnerability during market declines.
Near Market Bottom
Tests dynamic deployment capability.
Mid Bull Run
Tests ability to catch up during rapidly rising markets.
Multiple
Calculated as:
- Ascent Returns ÷ BSE 200 Returns
Why Alchemy Ascent
- Unbiased stock selection approach
- Back-tested across more than 21 years
- Covers multiple market cycles
- Data-driven and disciplined investing
- Ability to scan over 2000 stocks daily
- Focus on long-term CAGR generation
- Objective investment methodology
- Active portfolio management framework
- Average cash level around 5%
- Churn ratio approximately 1–1.2x
Alchemy Ascent Portfolio Performance
Alchemy Ascent Portfolio Composition
About Alchemy Capital Management
Alchemy Capital Management is a Portfolio Management Services provider in India registered with SEBI as a Portfolio Manager.
The firm operates from Mumbai and provides bespoke portfolio management solutions.
Our Investment Philosophy
Long-Term Investing Approach
The investment philosophy focuses on generating:
- consistent long-term returns
- superior absolute returns
- performance across market cycles
The strategy invests in:
- growth companies
- scalable businesses
- companies with strong management teams
Business Selection Framework
The investment process prefers businesses with:
- large and growing opportunities
- competitive advantages
- scalable operating models
- higher-than-average ROCE
Management Evaluation
Management quality is considered critical for long-term business success.
The framework evaluates management teams based on:
- execution capability
- alignment with business outcomes
- governance standards
- capital allocation discipline
Tactical Investing
While growth businesses form the core portfolio, the strategy may also invest in:
- deep value opportunities
- special situations
- cyclical opportunities arising during market cycles
Frequently Asked Questions (FAQs)
What is the Alchemy Ascent Strategy?
Alchemy Ascent is a data-driven portfolio management strategy focused on generating long-term risk-adjusted returns through disciplined equity investing.
What type of investment approach does Alchemy Ascent follow?
The strategy follows:
- quantitative investing
- research-driven stock selection
- disciplined portfolio construction
- systematic risk management
What is the typical portfolio size?
The portfolio generally holds approximately 25–30 stocks across sectors.
What benchmark does the strategy use?
The benchmark used is the S&P BSE 500 TRI.
What is the investment horizon?
The recommended investment horizon is 3–5 years.
What factors are considered during stock selection?
The strategy evaluates:
- company fundamentals
- valuation
- growth
- earnings quality
- balance sheet strength
- risk-reward ratios
Final Thoughts
Alchemy Ascent combines:
- quantitative research
- systematic investing
- disciplined risk management
- portfolio optimization
- long-term investing principles
The strategy focuses on objective and data-driven portfolio management across varying market cycles.
