Fund Management

AW Commodity Model Fund

Investment Process

3 steps of systematic wealth creation process forms the foundation of the equity products which are fine-tuned as per product specific mandate.

The entire commodity universe is broken into 4 sectors:

A.  Energy      B.  Precious Metals      C.  Base Metals      D.  Agricultural & Others

Portfolio Construction
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    As investment is done through Futures, all commodities have an in-built carry model that maximizes roll yield.

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    A host of both global and local macroeconomic factors encompassing different facets of growth and inflation are analyzed to form sector views.

Asset Selection
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    Individual commodity funds are selected based on the liquidity and regulatory profile for the different sectors.

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    The individual commodities are then analyzed through our NV proprietary intelligent system which is a consolidated view created by integrating supply-demand fundamentals, seasonality, momentum, sentiment and fund flows.

Portfolio Optimization
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    The portfolio optimization then takes place across both the commodity and sector level to minimize risk.

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    The long-short tactical overlays are placed to exploit more short term opportunities created by seasonality, momentum differences and liquidity patterns.

Investment Philosophy

Commodities as an asset class have equity like risk return profile but with a negative to neutral correlation to equities providing a high potential for portfolio and macroeconomic diversification. Moreover, commodities are uniquely placed to protect an investment portfolio from inflation and due to the "real" nature of assets protect the purchasing power

Objective


The objective of NV All Weather Commodity Model Fund in India is to work in multiple environments by investing in a diversified portfolio of commodity funds in India constructed to minimize volatility and augmented with systematic long-short overlays to account for supply demand and momentum differences. The recommended investment horizon for this strategy over 2-3 years.


There are many investors who are hesitant about investing in commodities, but commodity ETFs (exchange traded fund) make the commodity trading accessible to just every class of investor. We, at Narnolia, offer some of the best commodity funds in India, especially designed to meet the financial preferences of each investor.

Quarterly Composite Performance:


AW Commodity Fund
Year to Date (YTD)21.6%
30-Sep-20164.3%
30-Jun-20169.5%
31-Mar-20164.2%
As on 30 Nov 2016
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Know your Portfolio Risk Measures: Your Portfolio quality is higher even if your steadier returns.
Alpha Alpha is the excess return of the fund over the benchmark.
Beta Beta is a measure of the risk of the portfolio in comparison to the benchmark. A value of Beta <1 means lower risk than the benchmark while a Beta >1 means the risk is higher than the benchmark.
Annual Tracking Error Tracking Error is the divergence of the portfolio in comparison to the benchmark. It explains the excess risk in the porfolio as compared to the benchmark. It should be understood along with the Information Ratio.
Information Ratio Information Ratio(IR) explains the risk adjusted performance of the fund against the benchmark. IR is the ratio of portfolio excess returns (against the benchmark) divided by the Tracking Error. IR>1 is very good as it means that the excess return generated was greater than the excess risk vis-a-vis the benchmark.
Maximum Drawdown Maximum Drawdown is the maximum historical loss realized by the portfolio on a Mark to Market (MTM) basis. It indicates the maximum downside risk over a specified time period. A Maximum Drawdown lower than the benchmark indicates a better risk-adjusted portfolio.

Investing Involves Risk. This document is for information purposes only and should not be viewed as a legal offering document or solicitation. Offers to invest in this fund are made only by the Discretionary Portfolio Management Services Agreement. Past performance does not guarantee future results and there is no assurance that the managed accounts will necessarily achieve its objectives. Any forward-looking information and/or opinions contained in this document are based on the market information available at the time of publication and are subject to a number of known and unknown risks, uncertainties, assumptions as to future events and other factors that could cause the actual results to differ materially from those implied by the information set forth herein. This information is confidential and is intended for only the person or entity to whom it was sent and in no circumstances may this material be shown, copied, transmitted, or otherwise given to any person other than the authorized recipient. The sector allocations and holdings shown are based on the strategy's model portfolio. The holdings shown do not represent all of the securities purchased, sold or recommended for any particular advisory client and in the aggregate may represent only a small percentage of an account's portfolio holdings. Actual portfolios may differ as a result of account size, client-imposed investment restrictions, the timing of client investments and market, economic and individual company considerations. Securities are shown for illustrative purposes only and are not a solicitation to buy or sell any particular security or invest in a particular sector. Narnolia Velox may act as either a discretionary investment manager or a non-discretionary model provider in a variety of separately managed accounts. Any performance information included herein represents the performance achieved by Narnolia Velox as a discretionary investment manager with trade implementation responsibility for accounts included in a performance.

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Analyst Mohalla