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 |
Generate capital appreciation over medium to long term by capitalizing on the continuance of an existing market trend. |
Description of securities |
Client’s funds shall primarily be invested in equity shares of listed companies in India. Some part of funds might be invested in liquid / ultrashort funds or units of money market instruments 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 |
0-100% allocation will be in listed stocks in India. Occasionally, 0-100% allocation might be made in liquid or ultrashort funds / liquid ETFs / money market instruments / bank balance for liquidity purpose. |
Appropriate Benchmark |
S&P BSE 500 Total Return Index (TRI) |
Basis for choice of benchmark |
The portfolio will largely be selected from the top 750 stocks listed in India and dividends will be reinvested. Therefore, S&P BSE 500 TRI has been selected as the benchmark for comparing performance. |
Minimum investment |
INR 50 Lacs as per SEBI (PMS) Regulations 2020 or any other amount as may be stipulated by SEBI from time to time. |
Indicative tenor or investment horizon |
Medium to long term. 3-5 years for the portfolio manager to be able to maximize strategy performance. |
Lock-in period |
This investment approach shall not be subject to any lock-in period. |
Exit load |
Nil |