Valtrust Momentum
Overview
For decades, the core to investing has been to buy low and sell high. And this is where momentum investing is different – propels “buy high and sell even higher”.
This is a long-term strategy that primarily invests in Indian public equities with an aim to generate capital appreciation by capitalizing on the continuance of an existing market trend.
The strategy aims to capture significant investor biases like initial underreaction, delayed overreaction, herd mentality, and confirmation bias.
Selection Approach
Universe
NIFTY 750 Index
Filter
Ranking on a stock based on risk-adjusted metrics like Sharpe ratio and liquidity parameter
Selection
Top 30 stocks are selected
Monthly
The frequency may increase based on certain triggers
Key Characteristics
| Particulars | Description |
|---|---|
Investment objective |
To generate capital appreciation over medium to long term by systematically identifying and allocating capital to equities exhibiting high-conviction price momentum. Utilizing a data-driven, algorithmic framework, the portfolio ranks and selects stocks by emphasizing smooth, sustained performance relative to their risk (volatility-adjusted returns). The portfolio’s goal is to capture trend continuation. |
Description of securities |
Clients’ funds under the Valtrust Momentum portfolio would mainly be invested in the equity shares and instruments of companies listed in India. Some part of these funds might be placed in equity ETFs, liquid or ultrashort short funds/ETFs, units of money market instruments, units of mutual funds or might be retained as bank balance in bank account. |
Basis of selection of securities |
Stocks selection takes place based on momentum. Up to 32 stocks with strong technical trends are selected by taking positions in stocks going up and selling them when the trend reverses. |
Allocation of portfolio across type of securities |
The Portfolio is designed with a core mandate to invest majorly in equity securities seeking diversification across various sectors and market capitalizations. While maintaining a major focus on equity, the Portfolio Manager may, at times, tactically allocate a portion of the funds to equity ETFs, liquid or ultrashort short funds/ETFs, units of money market instruments, units of mutual fund or might be retained as bank balance in bank account. |
Appropriate Benchmark |
S&P BSE 500 Total Return Index (TRI) |
Basis for choice of benchmark |
The investment strategy will employ a multicap approach, incorporating holdings from large-cap, mid-cap, and small-cap companies. Following the SEBI directive of April 2, 2023, which requires the selection of a benchmark from Nifty 50 TRI, S&P BSE 500 TRI, and MSEI SX 40 TRI, the S&P BSE 500 TRI has been selected as the most suitable benchmark for this Portfolio. |
Minimum investment |
INR 50 lakh per PAN, as stipulated by SEBI (PMS) Regulations, 2020 (or any subsequent SEBI-stipulated amount). |
Indicative tenor or investment horizon |
Medium to long term horizon of 3–20 years. |
Lock-in period |
This investment approach shall not be subject to any lock-in period. |
Exit load |
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