Sameeksha PMS (Portfolio Management Service = Separately Managed Accounts) gained 5.6% (net of all fees and expenses), and carved a strong outperformance (alpha) when compared to the benchmark BSE500TRI which returned (0.6)% for the month of August 2023.
Sameeksha AIF (Alternative Investment Fund = “Hedge Fund”) gained 5.3% (post expenses pre tax), and carved a strong outperformance (alpha) when compared to the benchmark BSE500TRI which returned (0.6)% for the month of August 2023.
It is worth reviewing the key aspects of the performance of our PMS and AIF as summarized below:
PMS Performance And Other Details
Three important things must always be kept in mind when looking at performance data. First, for funds such as ours that do not follow model portfolio strategy, the performance of individual clients for different duration is important to look at. Second, some PMSes may be charging fees outside the PMS and hence after fees, performance data may not be comparable to ours. Third, it is important to look at not only portfolio returns but also risk adjusted ratios. We provide data to address all three points later in this note.
Aggregate Portfolio Returns Over Various Time Periods
Sameeksha PMS has delivered a substantial aggregate annual alpha of 58.4% over BSE500 TRI over the 8 financial years (including the current incomplete financial year) implying an average alpha of 7.3% since inception (Table 1).
1. Inception Date 1/4/2016 2.. Current financial year upto 31st August 2023
It is important to note that we have maintained relatively higher levels of cash (13.11% on average over the entire period from inception) from time to time over the duration of managing the portfolio. Notwithstanding the same, from inception as well as over five and three years respectively, we have generated returns of 22.5%, 27.7% and 34.8% beating the benchmark BSE500 TRI returns of 15.4%, 12.6% and 23.3% respectively after fees and expenses. We have delivered strong returns relative to benchmark across various key time periods. (Table 2).
1. Post Fees and Expenses, 2. Aggregate Portfolio , 3. Annualized For more than one year 4. From Inception (1/4/2016) till 31st August 2023
Aggregate Portfolio Performance and ranking on a rolling periods basis
Rolling returns are a more useful indicator of consistency in performance versus single period returns. For rolling three year periods applicable to our entire operating history, Sameeksha PMS has delivered aggregate annualized alpha 96% of the times (51 out of 53 observations) ranging from 0.4% to 23%. For the rolling five year periods applicable, Sameeksha PMS has delivered aggregate annualized alpha 100% of the time (30 out of 30 observations) ranging from 5% to 15% (Table 3).
1. For this calculation, alpha is calculated over BSE500 TRI
For rolling three year periods applicable to our entire operating history, we have been ranked among the multicap universe in the Top Decile 66% of the time (35 out of 53 observations) and in the Top Quartile 92% of the time (49 out of 53 observations). For the remaining 8% observations, we were ranked in the Second Quartile (Tables 4 and 5). For rolling five year periods applicable to our entire operating history, we have been ranked among the multicap universe in the Top Decile 100% of the time (30 out of 30 observations).
1. Top Decile = in top 10%, outperformed 90% of the funds 2.. 9th Decile = in top 20%, outperformed 80% of the funds
1. Top Quartile = in the top 25%, i.e. outperformed 75% of the funds 2. 2nd Quartile = in the top 50% i.e. outperformed 50% of the funds
Risk Adjusted Ratios: Not all returns are the same, Higher Returns at lower Risk
When compared on a risk-adjusted basis, our PMS shows an even stronger performance with a risk-adjusted alpha generation of 7.2% over the broader market benchmark since its inception. While our portfolio beta has been materially lower than our benchmark, our returns have been higher than the benchmark since inception, implying superior strong risk adjusted returns.
Furthermore, other risk-adjusted returns – Sharpe ratio and Treynor ratio, are also significantly higher than the benchmark (Table 6).
1. From Inception (1/4/2016) till 31st August, 2023
Performance within the PMS Universe
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Table 7: Comparison with PMS Multicap Universe as of 31st August 2023 |
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Fund or Category / Returns Generated 1 2 |
1 year (%) |
2 year (%) |
3 year (%) |
5 year (%) |
|
Sameeksha PMS |
39.2 |
16.7 |
34.8 |
27.7 |
|
Multicap Universe Average |
19.3 |
10.5 |
25.6 |
14.3 |
|
Decile Rank within the Multicap Universe |
Top Decile |
9th Decile |
Top Decile |
Top Decile |
|
Percentile Rank within the Multicap Universe |
Top 6% |
Top 19% |
Top 8% |
Top 1% |
|
Rank within the Multicap Universe 3 4 5 6 |
6th out of 84 |
16th out of 82 |
6th out of 69 |
1st out of 52 |
1. Post fees and expenses 2. Aggregate Portfolios 3. 84 Funds 4. 82 Funds 5. 69 Funds 6. 52 Funds
Returns of Individual Portfolios
Because we don’t follow model portfolio strategy, the performance of individual clients is far more important than overall portfolio aggregate returns (Table 8). For investors who are with us for 3 years and more, Sameeksha PMS has returned a very substantial alpha with an average annualized alpha of approx. 9.8% for the three year period ending 31st August, 2023. Similarly, for investors who are with us for 5 years or more, Sameeksha PMS has returned substantial alpha with an average annualized alpha of approx. 15.3% for the five year period ending 31st August, 2023. The table below shows the average annualized returns and alpha over different periods of time of all the clients as on 31st August, 2023.
1.S&P BSE 500 TRI 2. As on 31st August 2023 3. Age of Accounts rounded towards the nearest half year 4. Average rounded to the nearest decimal place. 5.TWRR Post fees and expenses.
Performance Of PMS Over The Covid Timeline (Pre, During, And Post)
1. Post fees and expenses
1. Post Fees and Expenses, 2. Aggregate Portfolio 3. As of 31st August 2023
For the calendar year 2023 till date, we have positioned ourselves well by outperforming the benchmark BSE500 TRI by 22.4%. However, for the completed calendar year 2022, we have underperformed the benchmark BSE500 TRI by 6.8% (Table 11). This can be mainly attributed to the onset of the Ukraine-Russia war at the start of the calendar year and the ensuing global economic crisis. Nonetheless, we have taken corrective actions since then and we hope to have a good calendar year 2023. However, we have outperformed the benchmark in five out of eight calendar years and the sum of outperformance of 77.2% in five years far exceeds the sum of underperformance of 16.5% in the remaining three years.
1. Post Fees and Expenses, 2. Aggregate Portfolio 3. As of 31st August 2023
It is important to note that we delivered this alpha despite maintaining an average cash level of 13.11% across the eight financial years.
Cumulative Performance versus the benchmark
Sameeksha PMS’s outperformance over its benchmark has continued to widen positively over the years. An investment of Rs. 100 with us since inception (April 2016) would have grown to Rs. 452 , far outpacing what one would have earned by investing in a fund that achieved benchmark returns (Figure 1).
Analyzing the sector performance during the month
During the month, sectors that showed growth in the indices include Banks, Finance, IT, Infra and Power. For Sameeksha, the Finance, Diamond & Jewellery, Healthcare and Auto sectors were major outperformers as compared to the benchmark. However, Sameeksha did not have sufficient exposure in Banks to participate in the upturn. Further, Sameeksha also did not participate in the rally of IT, Infra and Power sectors. Below is the attribution analysis for the month of August 2023 (Table 12).
1. BSE500TRI
Aggregate Fund Returns over various time periods
Since inception, we have maintained relatively higher levels of cash (22.4% on average over the entire period from inception) from time to time over the duration of managing the fund. Notwithstanding the same, from inception and over one year, we have generated returns of 22.5% and 33.3% beating the benchmark BSE500 TRI returns of 9.1% and 11.3% respectively after fees before taxes. (Table 13).
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Table 13: Fund performance2 in different periods since inception |
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Particulars |
Portfolio 3 % |
S&P BSE 500 TRI% |
Average Cash level% |
|
Since inception 1 |
22.5 |
9.1 |
22.4 |
|
1 year |
33.3 |
11.3 |
10.5 |
|
6 months |
30.8 |
17.3 |
3.1 |
|
3 months |
19.2 |
7.7 |
3.1 |
|
1 month |
5.3 |
-0.6 |
6.5 |
1. Since Inception ie. 10.02.2022 to 31.08.2023 2. Post fees Pre Tax 3. Aggregate Portfolio
Aggregate Fund Performance on a financial year and calendar year basis
For the month of August, Sameeksha AIF has outperformed the benchmark BSE 500 TRI by generating 5.3% returns (including the current incomplete financial year) against the benchmark BSE500TRI returns of (0.6)%. Looking at our performance over the financial years (Table 14), we have outperformed our benchmark in FY 2023 and we continue to outperform in the current incomplete FY 2024. For the financial year 2024 till date, we have positioned ourselves well by outperforming the benchmark BSE500 TRI by 12.3%.
1. Since inception i.e from 10.02.2022 to 31.08.2023 2. Post Fees Pre Tax 3. As on 31.08.2023
For the calendar year 2023 till date, we have positioned ourselves well by outperforming the benchmark BSE500 TRI by 19.0%. Despite being a new fund, we were still able to produce alpha for calendar year 2022 and outperformed the benchmark BSE500 TRI by 3.6%. (Table 15)
1. Post Fees Pre Tax 2. From 01.01.2023 to 31.08.2023 3. From 10.02.2022 to 31.12.2022
Risk Adjusted Ratios
When compared on a risk-adjusted basis, our AIF shows an even stronger performance with a risk-adjusted alpha generation of 14.7% over the broader market benchmark since its inception. While our portfolio beta has been materially lower than our benchmark, our returns have been higher than the benchmark implying superior strong risk adjusted returns.
Furthermore, other risk-adjusted returns – Sharpe ratio and Treynor ratio, are also significantly higher than the benchmark indices (Table 16).
1. Since inception i.e from 10.02.2022 to 31.08.2023
Performance within the AIF Universe
We present our rankings among Long Only Category III AIFs who report their post expense and pre tax returns. For the period ending 31st August, 2023, we are ranked 3rd out of 27 AIFs (Table 17). We are ranked in the Top Decile among 27 funds in the said category
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Table 17 :Comparison of Sameeksha AIF with Long Only AIFs (post exp pre tax returns) |
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Returns Generated |
1 year |
|
Sameeksha AIF |
33.3% |
|
Average |
23.1% |
|
Median |
21.8% |
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Median Among Top 5 AIFs |
33.3% |
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Sameeksha AIF Rank within the Multicap Category |
3rd out of 27 |
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Sameeksha AIF Decile1 Rank within the Universe |
Top Decile |
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Sameeksha AIF Percentile Rank |
Top 8% |
1. Top Decile = in top 10%, outperformed 90% of the funds, 9th Decile = in top 20%, outperformed 80% of the funds
Cumulative Performance versus the benchmark
Sameeksha AIF’s outperformance over its benchmark has continued to widen positively since inception. An investment of Rs. 100 with us since inception (Feb 10,2022) would have grown to Rs. 143, far outpacing what one would have earned by investing in a fund that achieved benchmark returns (Figure 2).
Analyzing the sector performance during the month
During the month, sectors that showed growth in the indices include Banks, Finance, IT, Infra and Power. For Sameeksha AIF, Finance, Diamond & Jewellery and Healthcare were major outperformers compared to the benchmark. However, what hurt us is the lack of sufficient exposure towards the Banks and IT sectors where we missed out on participating in the upturn. Below is the attribution analysis for the month of August 2023 (Table 18).
1. BSE500TRI