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Ambit Good And Clean

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About Company

Ambit is one in every of India’s most reliable carriers of economic recommendation and capital. We are targeted on turning in tailored economic answers which can be appropriate to our customers’ needs. These are primarily based totally on our deep expertise of the Indian economic system and marketplace forces, unequalled studies and our client-targeted approach.At the middle of our answers lies the ‘abacus’, which has ruled the improvement of mankind for centuries. Based in this ethos, we offer insightful answers that create intrinsic price for all our stakeholders.Our enterprise acumen offers us the cappotential to peer the large photo and recognize the levers that have an effect on the enterprise drivers via clever selections and movements that could growth the long-time period profitability for our customers and ourselves ensuing in sustainable growth. We agree with that at Ambit, we own the cappotential to interrupt down complexity whilst suggesting the greatest economic answers to our customers.

Fund Snapshot

Year of Inception 2015
Number of Stocks 13-18
Investment Horizon 3 Years
Fund Managers Aishvarya Dadheech

How did we deliver this?

A result of good processes is good risk-adjusted returns, which are characterized by:

  • Stringent quantitative filters

Each product is built on a framework that has undergone extensive study and backtesting to create the investing universe. The high bar for performance over extended periods significantly reduces the likelihood of underperforming or low-quality firms entering the investing universe. Corporate governance and the high caliber of accounting are not compromised.

  • Experienced team & deep-dive research

Devoted and knowledgeable research team All investment decisions must be approved by the Investment Committee, inspired by IE Research. Benefits of being a member of the broader Ambit group Concentrate on what is vital and what can be known.

  • Focus on earnings growth and earnings quality

Reduce the concern with timing when investing in firms of a higher caliber. We seek businesses with a good record of consistency and strong leadership. Current management capabilities plus past performance and future sector potential equals comfort in producing superior earnings.

  • Risk Management

Concentrated portfolios produce the best returns since the returns do not average out. Long-term-oriented organizations with low churn realize lower drawdowns since secular sectors have consistently performed well, Compounding’s strength.

Investment Process

Invest in companies that are (a) Good – Based on the history of capital allocation and the degree to which financial indicators have improved over the previous six years, and (b) Clean – Based on the accuracy of their financial statements and corporate governance.

Focusing on “good” encourages growth while maintaining “clean” standards prevents danger on the downside. While generating returns is the main goal, improving drawdown management is even more important because executing the latter is crucial for accomplishing the former.

Our patented “greatness” methodology at Ambit helps identify effective capital allocators with a comprehensive strategy to steady growth. In contrast, our proprietary “forensic accounting” structure helps screen out companies with low-quality accounts.

The result is a portfolio of 15-20 stocks with minimal turnover (not more than 15-20% of the portfolio each year translating to 2-3 holdings being replaced), which pulls down less than the market during declines.

Investment Philosophy

It ranks companies as clean companies with no political connectivity but has high corporate governance, clean accounting, high promoters’ integrity, who don’t compromise on ethics, have no political party-related transactions, and don’t favour linkages to bureaucrats.

In comparison, Ambit Good & Clean ranks companies as Good Companies based on focused capital allocation, high return on equity, high return on capital employed, oligopolistic nature of the business, high earnings and high cash flows.

Its proprietary forensic accounting framework identifies good accounts.

In contrast, its proprietary greatness framework identifies companies with consistent growth potential resulting in a concentrated portfolio of 15-16 stocks. And who have a low churn of less than 15-20% in any year amounting to 2-3 assets being replaced.

Case Study

Due to flaws in the accounting and auditing procedures, a reputable Big 4 auditing firm that has been working with the company since 2008 failed to report Wirecard’s “unorthodox financial arrangements.” Another Big 4 auditing company was later retained to conduct a special audit, which indicated that it could not confirm the validity of the agreements that accounted for the majority of the Wirecard earnings recorded from 2016 to 2018. The focus of the debate is the missing Euro 1.9 billion from Wirecard, which was supposed to be deposited in banks worldwide but was never found. The sum was about a fourth of the company’s sales from 2016 to 2019.

Unique Feature

Their recent study demonstrates that, in addition to firm-specific competitive advantages, the following three elements are crucial for a company to outperform continually:

  • Clean Accounting.
  • Conservative Capital Allocation.
  • Good governance and lack of political connectivity. 

Clean Accounting

Since November 2010, the top 60% of the BSE500 equities have outperformed the bottom 40% by a staggering 12% annually.

CONSERVATIVE CAPITAL ALLOCATION

The aggressive capital allocation practices of Indian businesses are among the most costly to their owners.

Good governance and lack of political connectivity. 

Political connectedness is seldom a key competitive advantage for businesses in India.

FAQs

What is so unique in the investment process followed by Ambit’s good and clean portfolio?

The unique feature of Ambit, good and clean, lies in the way they select their firms. They ensure to see the two qualities in the firm.

First, the firm should be reasonable based on capital allocation and qualitative improvement in financial metrics.

Secondly, the firm should be clean based on the quality of the accounts and corporate governance.

What is the idea behind Ambit good and clean portfolio?

The initial objective is to generate returns, while the big goal is to manage drawdowns as they believe in doing the latter successfully to achieve the former.

What is the time horizon and turnover?

The investment horizon is for 1-3 years and longer. Average turnover is 15-20%

What is Ambit’s greatness framework?

Ambit’s greatness framework includes:

Investment

Conversion of investment to sales

Pricing discipline

Balance sheet discipline

Cash generation

This framework aims to look at the holistic and consistent growth for long-term wealth creation.

Are Cash calls advisable for Ambit’s Good and Clean?

It is advisable not to take aggressive cash calls as it is a long-term investment horizon fund. And also for taxation point of view

What are the few features of Ambit Good & clean?

Few features are:

It is a mid-cap-oriented portfolio.

The ideal investment horizon of 3-5 years.

Growth at a reasonable valuation

What is the optimizing strategy of Ambit Good and Clean?

Good and Clean strategies are as follows:

A process-oriented approach– Ambit follows a pre-designed framework for assessing accounting quality and efficacy of capital allocation. Evaluation is then done using the bottom-up approach.

Long-term horizon and low churn- Investment for 3-5 years and even longer with annual churn not exceeding 15-20% in a year.

Low Drawdowns- The strategy aims for Long-term return generation and low drawdowns in periods of equity market decline

How does Ambit delivers good-adjusted returns?

Ambit delivers good-adjusted returns by:

Stringent quantitative filters

Experienced team and their deep research

Focus on earning growth and quality

Risk management.

Who is the current fund manager of Ambit’s good and clean portfolio?

Aishvarya Dadheech is director and fund manager of Ambit’s good and clean. He has an immense experience of twelve years. He has done his post-graduation in finance and holds a Chartered Accounted degree. Aishvarya is a perfect combination of smart and hard work

Where can we find the fee structure and commission rate of Ambit’s good and clean?

For details about the fee structure and commission rate, you can contact https://aifpms.com/contact/.

Write us your queries related to investment, and we will revert you as soon as possible. Here, we at https://aifpms.com/ are always ready to help you serve you with the best. Your solutions are just a click away.

About Fund Managers

Aishvarya Dadheech – Director & Fund Manager – Ambit Investment Advisors Private Limited

Aishvarya Dadheech

Ambit Asset Management’s Ambit Good & Clean Midcap Portfolio and Ambit Emerging Giants Portfolio are managed by Aishvarya. He has over 13 years of investment and equity research expertise. Before joining the Asset Management division, he was a Vice President in the firm’s Principal Investment division, where he was responsible for managing Ambit’s shareholder money. Aishvarya spent seven years as an Equity Fund Manager at Reliance Life Insurance before joining Ambit’s Principal Investment division in 2017. He was a member of the investment team that oversaw a $2.5 billion AUM. He also spent three years as an Equity and Credit Analyst at CRISIL Limited (a Standard & Poor’s Company). Aishvarya is a Chartered Accountant and a CFA® charter holder. He has an MBA in Finance and a bachelor’s degree in Accounting (Honours) from St. Xavier’s College in Kolkata.

Manish Jain:Fund Manager at Ambit Investment Advisors

Manish Jain Portfolio - Fund Manager Ambit PMS

Manish Jain holds a Chartered Financial Analyst (USA) designation and a Management and Human Resource Development MBA from the Symbiosis Centre in Pune.He is currently working with Ambit Investment Advisors as a Fund Manager of coffee can PMS. He worked for Nomura as a lead analyst covering FMCG, electrical durable, and retail.For a decade, Manish has had a lot of experience working in Equity Research Space as he has served Motilal Oswal, Lehman Brothers, Enam Securities, ICICI Securities for the same. With his dedication and love towards researching, he has been voted the best performing analyst in the research team for the past four years by ADIA, Capital World.Coffee Can PMS is performing its best under the exceptional outstanding leadership of Manish Jain.

Product - AMC Category AUM (in Cr.) Performance 1M 3M 6M 1Y 2Y 3Y 5Y 10Y SI

Ambit Coffee Can Portfolio

AMC Name: Ambit Investment Advisors Limited Inc Date: Mar-2017
large cap
(PMS)
1026 Strategy 5.60 12.70 7.80 4.30 23.60 19.40 18.00 NA 19.30
Nifty 50 3.50 7.10 5.70 3.70 24.90 17.20 12.40 NA 13.30

Emerging Giants Portfolio

AMC Name: Ambit Investment Advisors Limited Inc Date: 1-Dec-17
small cap
(PMS)
253.18 Strategy 9.10 16.60 11.70 10.80 30.00 33.70 NA NA 16.90
BSE Smallcap 5.90 8.60 7.50 6.40 41.40 31.70 NA NA 10.30

TenX Portfolio

AMC Name: Ambit Investment Advisors Limited Inc Date: 13-Dec-21
multi cap
(PMS)
99 Strategy 7.30 14.30 10.90 NA NA NA NA NA 4.50
BSE 400 5.80 9.20 8.50 NA NA NA NA NA -1.40

Good & Clean Mid Cap Portfolio

AMC Name: Ambit Investment Advisors Limited Inc Date: 12-Mar-15
mid cap
(PMS)
636 Strategy 3.50 8.80 7.20 6.00 27.50 19.30 15.30 NA 14.10
Nifty Midcap 100 6.20 11.30 11.50 10.80 37.40 26.20 11.50 NA 12.20

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Disclaimer: 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 their objectives. We do not guarantee any returns in the hand of investors not we take any sort of accountability for the performance of the scheme. The above-mentioned data is collected from the respected Fund house please verify the same at SEBI website.