Fund Management

Eagle Large Cap Growth Fund

Investment Process


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

Investment Universe Creation & Classification
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    Data analytics on over 1600 stocks (99.5% of total market cap).

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    Grouping of stocks into 4 Cap, 10 Sectors, 44 Industries, 76 Sub-Industries, style based and theme based classification.

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    Stocks Quantitative Parameters: Earning Score (ES) and Price Score (PS) using detailed financial accounting data.

Approved 'Buy' List Preparation
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    Analyzing each company's valuation, growth and financial history for last 10 years.

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    Identifying valuation multiple for each Industry through extensive testing on over 80 financial parameters.

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    Stocks analyzed using three fundamental attributes based on earnings momentum (M),capital allocation & payout ratio (C) and quality of return ratios (Q).

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    Identifying companies with appropriate growth and value characteristics.

Focused 'Buy' List Preparation
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    Rigorous bottom up fundamental analysis of companies in approved 'buy list' to ascertain stocks with sustainable high/rising return ratios.

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    Identify trends for stocks in approved 'buy list'on peer relative basis by using financial mapping technique.

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    Sensitivity analysis to ascertain margin of safety in terms of financials, valuation, liquidity and predictability.

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    Identifying top 70 stocks for Portfolio recommendations.

Risk Management
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    Proprietary model to allocate optimal weights to various industries. Portfolio weighting is revised based on industry index performance & adaptable sniffing model using fundamental parameters to decipher 'themes in force' in the market.

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    Optimal portfolio weightings to avoid risk concentration.

Investment Philosophy

Our investment approach combines quantitative and fundamental research. Our risk-controlled process seeks to consistently exploit any inefficiencies in the short-term market that cause some stocks to be overvalued & undervalued on both standalone and relative basis, creating opportunities of capital appreciation versus the benchmark.

Objective


The key objective of the NV Eagle Large Cap Value Equity Fund is to outperform Nifty 50 (the fund's benchmark)while closely tracking Nifty 50 on a sustainable risk adjusted basis. This is done by managing the beta of the portfolio to Nifty 50 while adding alpha opportunistically based on a rigorous bottom up proprietary model. To use cricketing parlance, the portfolio construction is optimized to hit singles and doubles as opposed to fours and sixes. This makes it very resilient, especially in bearish and sideways markets by minimizing negative effects of deleveraging in such environments.

Historical Quarterly Composite Performance (%)

 Eagle**Benchmark*Alpha***
Last Twelve Months24.4%18.5%5.9%
31-Mar-201712.5%12.1%0.4%
31-Dec-2016-5.4%-4.9%-0.4%
30-Sep-20168.2%3.9%4.3%
30-Jun-20168.1%7.1%1.0%
As on 31 Mar 2017
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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