Portfolio Type: Concentrated portfolio of mid-cap companies with a good record and clean accounting
Inception Date: 12 March 2015
Number of Stocks: 13-18
Fund Manager Name: Aishvarya Dadheech
Fund Manager Experience: Total Exp – 12 Years
With Ambit – 2 Years
Fund Manager Qualification: CFA charterholder, Chartered Accountant and MBA Finance.
What is the time horizon : Invest with Minimum 3-year horizon, ideally 5 year horizon..
Exit Load Structure : Zero Exit Load
Investment Objective: Equity exposure to Indian businesses that have an impeccable track record of clean accounting and governance, and efficient capital allocation.
Investment Strategy:
(A) Good – Selection of companies on the basis of capital allocation track record and quality of improvement in financial metrics over the past six years.
Focused capital allocation | High ROE | High ROCE | Oligopolistic nature of business | High Earnings | High Cash flows
(B) Clean – Selection of companies on the basis of the quality of their accounts and corporate governance.
No political connectivity | High corporate governance | Clean accounting | High Promotors integrity | Ethics never compromised | No related party transactions | No favours to relatives | No linkages to bureaucrats
The ‘Good’ strategy helps generate upside while not compromising on the ‘Clean’ strategy, which reduces downside risk. Essentially, while the objective is to generate returns, the even bigger goal is to better manage drawdowns because the company believes doing the latter successfully is critically vital in achieving the former.
Ambit’s proprietary forensic accounting framework helps weed out firms with poor quality accounts while our proprietary greatness framework helps identify efficient capital allocators with a holistic approach to consistent growth. The result is a concentrated portfolio of 15-16 stocks that draws down lesser than the market in corrections and has low churn (not more than 15-20% of the portfolio in any year amounting to 2-3 holdings being replaced).
