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Our team spends countless hours on research and due diligence to ensure that our clients enjoy the benefits of returns from all asset classes. New or old, traditional or modern, sophisticated or simple, we assure that our clients are comfortably placed vis-a-vis various sectors, industries, and asset classes. Life is about including top performers, average performers, and realigning the underperformers. You will have the sun, the storm, the clouds, the rain, and normal weather in the sky.
We are not restricted to India, South Asia, Asia, or any geographic region. To the best of our ability, we place ourselves where the going is good. Whether it is real estate in a booming economy, manufacturing in a developing country, or AI in a tech hub, we make sure your portfolio gets returns from across the world and is relatively insulated from domestic and global downturns. We have been investing overseas worldwide since 2006 when Principal AMC launched their global fund in India.
We strongly believe that time in the market is far more important than timing in the market. Short-term trading makes a quick buck, but ends up increasing cost and adds no assurance of return. However, given enough time, your money is exponentially more likely to provide you with a comfortable and luxurious future. To this end, we respect and adhere to market cycles which run from 7-10 years. Over time, your portfolios will likely grow bigger than the value of your house if you choose to commit 50-60 pc of your disposable savings into financial assets - something that is only possible because of prudence and good risk management. Indians are famous for real estate and gold investments.
Asset managers want to beat the index. But what happens if the index falls 20%? A one crore-rupee portfolio falls to 80 lakh, and if your portfolio is above 90 lakh, the fund manager’s bonus is assured. We instead try to generate positive real returns after understanding how much time you have for investment and your goals, as well as how much risk you are willing to take when the market falls.
We have a 35-year track record of compounding and creating wealth. People think the financial market is an exciting place where they buy and sell their portfolios, but end up paying brokerages, and short-term and long-term tax. The more trading decisions you take, the higher the chances of going wrong. We are a check against high investing costs. We are also defined by investment decisions that we did not take, for example, Reliance Power IPO, Future Retail, Religare back in 2008 when the whole country was gaga on IPOs. In 2020, we did not sell a single New Fund Offer from any asset manager as we could not understand the value added by the product - it can be a lonely walk to take the road less travelled.
Active funds vs passive funds vs direct (Low Cost vs High Cost)
Our company has had a passive strategy from 2006 when we started with Franklin Templeton’s index funds, when nobody had even heard of passive investing. Life is neither black nor white, it’s not cold or hot - it’s in the middle. We have been buying passives in India from 2006 as well as hyper low cost products from 1998 when direct was not even heard of. A portfolio will typically be active as well as passive and, of course, low margin - predictable products will be low cost and lower return while research-based products will be high cost, high risk, high return. We have hit 50-80 pc returns on small cap funds and 3 pc returns on overnight funds, and a good portfolio needs all of these in balance. With each asset manager having hundreds of plans with multiple risk/duration profiles and with a plethora of asset managers in the market, direct plans being priced differently for differing risk across AMCs, good luck to folks who can figure out direct when asset managers themselves cannot figure out their competition. Typically, direct money goes to the highest return funds on a website till one day they crash, please remember old schemes disappear when they are performing badly so all information displayed on an asset manager’s website only shows survivor bias and the best wine glasses are kept on the shelf, underperforming schemes are merged. We have also found when people pass on, their family members do not even have access to their login details. So, navigating direct has its own plethora of issues in addition to promoting impulsive buying and selling based on media hype, television, and internet news which can be very hypnotic and promote herd behaviour.
Low Cost vs High Cost
Life is neither black nor white, it’s not cold or hot - it’s in the middle. We have been buying passives in India from 2006 as well as hyper low cost products from 1998. A portfolio will typically be active as well as passive and, of course, low margin - predictable products will be low cost and lower return while research-based products will be high cost, high risk, high return. We have hit 50-80 pc returns on small cap funds and 3 pc returns on overnight funds, and a good portfolio needs all of these in balance.
Only 50 pc of our investment philosophy is made up of finance knowledge. The remaining 50 pc is fear, sweat, walking away when greed takes over, sitting quietly for years if needed, and selling when the whole world is buying.
Growth vs Value
Don’t get confused by the terms ‘growth’ and ‘value’. These are the finance industry/media’s ways of tying you into knots - remember that they have to fill 24 hours of programming time. It’s like asking if you need to study or exercise or sleep - it’s an easy answer, you need all three.