Alta Cura AI Absolute Return Fund – Category III AIF

The investment philosophy of the Alta Cura AI Absolute Return Fund – Category III Long-short Hedge fund is designed to achieve consistent absolute returns with a very low drawdown across market cycles. The fund’s approach is characterized by:

– Return Profile: Targeting a projected return of 7-9% net of fees and taxes, indicating a focus on delivering solid returns to investors while managing costs efficiently.

– Diversification: Striving to deliver strong performance across various market cycles, including bear, bull, and consolidation phases, which suggests a strategy that is adaptable and resilient to changing market conditions.

– Risk Profile: Aiming for zero target drawdown in a year with a projected peak to trough of -1/2%, demonstrating a commitment to capital preservation and minimizing losses.

– Tax Profile: The income is predominantly from derivatives, which indicates the use of sophisticated financial instruments to achieve the fund’s return objectives.

The fund seeks to maintain a careful balance between risk and return, leveraging diversification and a robust risk management framework to pursue stable returns that are uncorrelated with broader equity and debt markets.

The investment strategy of the Alta Cura AI Absolute Return Fund – Category III Long-short Hedge fund employs an AI-backed GQVM model for constructing its portfolios. Here’s how the strategy is broken down:

– Growth: The fund selects stocks based on growth indicators like revenue, EBITDA, operating profit, core earnings, adjusted cash flows, and tangible assets.

– Quality: It evaluates the quality of companies by examining retained earnings, earnings volatility, return on capital employed, return on equity, and return on assets.

– Valuation: The fund uses a variety of relative valuation metrics, including EV/EBITDA, P/E, P/B, P/S, and P/C ratios. It also considers asset replacement costs, sectoral valuations, and style valuations to assess the worth of the companies.

– Momentum: It looks at momentum indicators such as moving averages, the Relative Strength Index (RSI), and patterns like crossover and divergence to determine the timing of entry and exit in stocks.

The AI algorithm, rooted in deep data science, ranks all stocks from the BSE 100 based on these factors to construct long and short portfolios. This multi-faceted approach aims to harness consistent returns, minimize drawdowns, and generate uncorrelated returns with the broader equity and debt markets.