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Exclusive Webinar on Motilal Oswal Hedged Multi-Factor Strategy AIF – A Unique Proposition

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An exclusive webinar was held between Mr Vikas Agrawal, the Founder and CEO of AIF & PMS Experts India Pvt. Ltd. and Mr Sankaranarayanan Krishnan. Mr Krishnan holds the position of Associate Vice President & Quant Fund Manager at Motilal Oswal Asset Management Company Ltd. Like always, viewers of this webinar gain knowledge about investment terms, methods and benefits for patients.

Webinar Overview

  • Motilal Oswal is an organisation they’re known for fundamental analysis and long-term investment processes. This process orients the ‘buy right and sit tight’ approach. In parallel, viewers will learn some basics of a comparatively new and effective fund management method.
  • Viewers of this interesting webinar will know about the concept of ‘Quant fund management’. It is famous and commonly used across the globe. Hence, this fund management technique is used, and Motilal Oswal Asset Management is doing that successfully.
  • People can variously describe quant fund management from various perspectives. Someone who is following a simple process, where the person will buy every time the current price moves above and sell every time it crosses it from the below. This systematic fashion can be called quantitative.
  • Here are some numbers behind it, something as straightforward as this is also a quantitative trading strategy. One can go all the way to the other end, where you can keep adding complexities on various levels so you can keep saying okay that you don’t need different managers that can have different strengths.
  • Our speaker expressed his thought on this. He’s comfortable with the fundamentals of things and uses statistical data along with technical analysis. A rule can be designed around it, whether simple or complex. It’s a quantitative strategy driven by data and prior knowledge that fund managers can use.
  • He also mentioned how this fund technique affects the U.S. Quantitative strategies can trade, not just equities; they can trade commodities that can be traded as currency, fixed income or else.
  • The webinar guest talked about his preference for the quality of investing and the company’s quality.
  • He also mentioned the upcoming prospective of Artificial Intelligence and Machine Learning, like new-age technologies in the fund investment. But according to him, these technologies have to evolve more to meet the efficiency of humans’ skills in this domain.
  • They discussed the strategy of the multi-factor hedge equity and how it works.

About AIF & PMS Experts India

AIF & PMS Experts is a diverse asset portfolio Alternative Investments firm. Our primary services comprise Portfolio Management Services, listed and unlisted Public Equity, Private Debt Structured Products, Venture Capital, and Real Estate Alternative Investments.

AIF & PMS Experts India anticipate an integrity perspective with governance, transparency, and enabling our clients’ long-term wealth creation at AIF & PMS Experts. Our various products, analytics, and data-driven strategies are critical to our business and assist us in meeting our objectives.

Fund Manager Profile

Mr Sankaranarayanan Krishnan is a quant fund manager for Motilal Oswal Asset Management Company Ltd.’s PMS and AIF schemes. He is in charge of handling the funds and overseeing the firm’s factor and quantitative research. Mr Krishnan has over 9 years of experience in the capital markets, most of that time spent developing, analysing, and implementing quantitative investing methods.

He worked previously as a multi-factor model portfolio manager for Alpha Alternatives, an alternative investment firm. Before that, he was a senior quantitative researcher at Morgan Stanley Capital International, where he crafted multi-factor and ESG solutions for global pension and sovereign wealth funds. Mr Sankaranarayanan earned his MBA from the Indian Institute of Management in Indore, and Krishnan’s engineering degree is from the National Institute of Technology in Nagpur.

Investment Strategy

The fund’s primary goal is to invest in stocks and equity-related assets across the market capitalisation spectrum to achieve long-term capital growth. Furthermore, the strategy would invest in derivatives products such as options and futures permitted by applicable laws to hedge against significant losses caused by market downturns.

The fund’s portfolio is distinct, with low overlap with the NIFTY 50 index and lower BFSI exposure, resulting in a much lower correlation with the NIFTY 50 index. The portfolio is built on a model that combines factors like Quality and Low Volatility, which have previously delivered alpha in declining markets, with variables like Value and Momentum, which have historically performed well in rising markets.

The Motilal Oswal Hedged Equity Multi-Factor Strategy AIF is the first of its kind, combining a multi-factor, model-driven, and quantitative investing approach with tail-hedging. This scheme is designed with a low overlap with Nifty 50 companies and a correlation of approximately 65-70%, resulting in a differentiated portfolio exposure. The equity portfolio is completely automated, with no human intervention in stock selection or weighting. The equity strategy employs several investment factors to create a concentrated portfolio of 20 to 25 equity stocks.

Over ten years, beginning in 2011, the strategy’s back-tested returns were able to generate higher returns at lower volatility than the scheme’s benchmark, the NIFTY 500 TRI.

Key Features of Stock Selection Framework

This framework is segmented into four key parts. Such as Opportunity Universe, Apply Quality Filter, Select Companies based on Value and Momentum and Final Portfolio.

  • Opportunity Universe: Restrict the universe from 51-300 by market capitalisation.
  • Apply Quality Filter: Approximately 75 companies are selected based on certainly applied quality filters.
  • Select Companies based on Value and Momentum: Approximately 20-25 company portfolios are chosen based on value and momentum.
  • Final Portfolio: Professional rebalancing is done in a quarterly manner.

The above-mentioned key features of the framework for selecting proper stocks of firms enhance the fund strategically more.

Webinar Key Points

  • Mr Vikas tried to read his mind to enhance the knowledge of his investors, and he did that successfully. This exclusive webinar will bring a lot more to its enthusiastic viewers.
  • People will understand the significance of quant fund management.
  • Humans are not so familiar with the cyclical process. Investors should have the proper patients to get a return. Best performing companies are often cyclical.
  • The bull market lasts long; hence fund management should be done properly.

Parting Note

The quant fund management may seem new, but with hedge multi-factor strategies, fund management becomes easy. Data is important for making decisions, but it should be in a systematic manner. Interested investors can contact AIF & PMS Experts India Pvt. Ltd. for better fund management. You can mail us at [email protected] or visit our webpage https://aifpms.com/contact/

People can also call us at 8368586435 or 1800 210 1995.

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