An exclusive webinar was recently held on YouTube between Mr Anand Vardarajan and Mr Vikas Agrawal. Our webinar guest, Mr Anand Vardarajan, is the Business Head – Banking, Alternate products and product strategy of Tata Asset Management. On the other hand, Mr Vikas Agrawal, our webinar guest, is the Founder and CEO of AIF & PMS Experts India Pvt. Ltd.
Webinar Overview
- In this webinar, the viewers will get a close understanding of the ‘Long-short fund’ by Mr Anand.
- He expressed his journey from the distribution to the product development side at Tata.
- The Long-shot category has two categories; enhanced and absolute.
- If one has a portfolio and invests, he or she will make money. The underlying value starts going up, and they’re right on those picks.
- What an investor buys has to be right and has to go up. If the buyer is correct, investors will make money.
- Markets do not always go up in a particular direction. Sometimes, it goes with a flat line, or the curve might be lower. The market could be in a Bear market.
- The market has its ups and down during its journey. Hence, if you are investing, you must prepare for both scenarios.
- There is some instrument which will benefit from the market downside. The long-short fund does exactly that instrument.
- In this case, you have a benchmark, and you have several overweight stocks and underweight stocks. You also have the sector allocations stock allocation. Experts allocate sectors and take half from overweight stocks and underweight segments. If the long and short funds are taken correctly, you have a return on your investment.
- You can accept the passive index and have Alpha.
- When the market goes through a neutral experience, combinations can be created using Long-shot fund strategies. Therefore, as an investor, you can have a neutral market opportunity, enhanced equities, and so on.
- He debunked a myth related to investing. For some, taking an AI hedge fund means taking more risk, but it reduces the risk and tries to market-like returns.
- Investors can make money by expressing their views on both sides, which is on the Long and Short sides.
- AIF Long-short funds diversify the allocation as a separate allocation. Thus much money should be in a Long or Short fund at any time. It continues to create some amount of Alpha consistently. It is important from the portfolio’s point of view.
About AIF & PMS Experts India
AIF & PMS Experts is a diverse asset portfolio Alternative Investments firm. Portfolio Management Services, Public Equity (both listed and unlisted), Private Debt Structured Products, Venture Capital, and Real Estate Alternative Investments are among our core services.
We forecast a perspective of trust-building with governance, transparency, and encouraging our clients’ long-term wealth creation at AIF & PMS Experts. Our various products, analytics, and data-driven techniques are critical to our business and assist us in meeting our objectives.
We believe in India’s growth story. Substantial investments are required to propel economic growth. Our Founder, Mr Vikas Agrawal, exemplifies this belief. He enjoys deciphering strong points and unravelling business and management flaws.
Profile of The Business Head
Mr Anand Vardarajan is the Business Head of Banking, Alternate products and product strategy at Tata Asset Management. He has more than twenty years of domain experience. Mr Anand has exceptional experience in the distribution side as well as in the product development side.
Investment Philosophy
- Reduces asset depletion as well as value creation possibilities.
- Because of this fund’s low volatility and decent returns, it appeals to all investors, including HNIs, corporate/bank treasuries, and health insurers.
- The fund’s objective is to conduct investment activities to create a ‘dual’ portfolio strategy consisting of a Core Portfolio and a Derivative Portfolio to generate long-term capital appreciation with lower volatility than the broader equity market.
- Outperform the benchmark by implementing a ‘Dual’ portfolio strategy, which involves creating a Core Portfolio and a Derivatives Portfolio.
- Equity portfolios would provide long-term capital appreciation in line with equity markets, while derivatives would provide consistent and good returns.
- The fund combines a Core Portfolio of Equities (multi-cap) and Fixed Income and/or Cash Equivalents with a Derivative Portfolio primarily comprised of equity derivatives stances.
- The fund seeks to outperform in bullish equity market directional sensitivity and to underperform in bearish market phases.
- The fund serves as a new asset class for investors, allowing them to diversify away from risky assets.
Understanding Long-Short Fund
- Investing through long-short funds is one of the most efficient ways to control these fluctuations. The fund manager in these funds buys stocks expected to rise and reaches into derivative contracts to sell short on stocks that are allowed to decline in the future. They expect to profit from these derivative contracts, which will boost the fund’s overall returns, particularly in a bear or sideways market.
Long-short funds are one of the most popular types of alternative assets worldwide. It falls under AIF Category III. A long-only investment strategy typically exposes investors’ portfolios to market cycles.
- Most conventional equity offerings are benchmark-hugging and thus rise and fall in tandem with the broader indices. The long-short strategy permits the fund manager to adjust the net exposure based on whether they are bullish or bearish. It limits the downside in bear market markets, allowing them to rise higher. When trends turn bullish, it also outperforms long-only offerings regarding returns.
Investment Purpose
TATA Equity Plus Absolute Return Fund- Category III AIF’s investment objective is to use a ‘dual’ portfolio strategy to build a Core Portfolio and a Derivatives Portfolio to generate long-term capital growth with lower volatility than the NIFTY 50 index.
Strategy for Investing
This category III AIF fund’s investment strategy is designed in such a way that their fund = Investment portfolio + Hedge portfolio.
The investment portfolio is designed to generate alpha above the Nifty 50. It is accomplished through the following processes:
- Stock Selection,
- Portfolio Construction and
- Stock Exit Strategy.
The hedge portfolio is designed to produce positive returns and cash regardless of market conditions. It is accomplished by the following.
- Long and short positions,
- Portfolio supplementation,
- Focus on the risk: return,
- Profit booking orientation and
- Dynamic Gross exposure modifications.
Performance of The Fund
| 1 Year | Since Inception | Inception Date | No. of Years |
| 10 | 24.6 | 1st April 2019 | 4 |
As of 31st October 2022.
Webinar Key Points
- The market always goes through its up and down cycle; investors should be capable of digesting this.
- For a better investment approach, one shouldn’t always look for the market direction or correction.
- A Long-short fund gives less volatility risk and a better return than a fixed-return investment.
- Category III AIF could be very beneficial from an investor’s perspective.
- It may be possible the investor community will become familiar towards the AIF like other fund investments.
Parting Note
If you want to invest in a low volatility risk and a good return on your investment, you can go with a Long-short fund investment. Hence, you might need an expert suggestion in this regard. AIF & PMS Experts India Pvt. Ltd. can help you through its years of experience, unbiased suggestions and consistent growth.
Investors like you can visit our website: https://aifpms.com/contact/ to know more about investment and call us at 8368586435 or 1800 210 1995.
You may also like to mail us at [email protected]