Marginal Alpha In A Strong Month For The Markets

Buoyed by strong news from the Indian Economy (accelerating growth momentum and falling inflation) , the markets posted a strong month. Key market indices including the NIFTY 50 and the BSE Sensex clocked 2.2% and 2.1% respectively for the month of May.  In May 2023, Sameeksha India Equity Fund (‘Sameeksha AIF’), a SEBI registered Category III Alternative Investment Fund gained 4.5% (net of all fees and expenses), and managed to carve an outperformance as compared to the benchmark BSE500TRI which gained 3.9%. 

Fund Performance Across Various Periods

Since inception, we have maintained relatively higher levels of cash (26% 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  13.9% and 19.2% beating the benchmark BSE500 TRI returns of 4.8% and 12.9% respectively after fees before taxes. (Table 1).

Table 1 : Fund performance2 in different periods since inception
ParticularsPortfolio (Post exp Pre tax ) %Portfolio (Post exp Post tax ) %S&P BSE 500 TRI%BSE Mid Cap TRI %BSE Small Cap TRI %Average Cash level%
Since inception 113.911.
1 year19.216.712.918.516.818.4
6 months9.17.7-
3 months12.010.58.912.311.78.1
1 month4.
1. Since Inception ie. 11/02/2022 to 31/05/2023  2. Aggregate Portfolio  

Risk Adjusted Ratios

When compared on a risk-adjusted basis, our AIF shows an even stronger performance with a risk-adjusted alpha generation of 8.3% 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 2).  

Table 2 : Risk Adjusted ratios 2
ParticularsPortfolioS&P BSE 500 TRI
Jensen’s Alpha (x)8.30.0
CAPM Beta (x)0.51.0
Sharpe Ratio (x)1.20.4
R-Squared (%)73100
Treynor (x)21.75.7
1. Since inception i.e from 10/02/2022 to 31/05/2023 

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 May 2023, we are ranked 8th out of 23 AIFs (Table 3).  We are ranked in the 7th Decile among 23 funds in the said category. 

Table 3 :Comparison of Sameeksha AIF with Long Only AIFs (post exp pre tax returns)
Returns Generated1 year
Sameeksha AIF19.2%
Median Among Top 5 AIFs22.5%
Sameeksha AIF Rank within the Multicap Category8th out of 23
Sameeksha AIF Decile1 Rank within the Universe7th Decile
Sameeksha AIF Percentile RankTop 32%
1. 7th Decile = in top 30%, outperformed 70% of the funds

Analyzing The Sector Performance During The Month

During the month, indices that showed growth this month include IT, Auto & Ancillaries, FMCG. For Sameeksha PMS, the Aviation, Bank, Logistics and  IT sectors were outperformers compared to the benchmark. However, what hurt us is the lack of exposure towards FMCG and Auto & Ancillaries where we missed out on participating in the upturn. Below is the attribution analysis for the month of May 2023 (Table 4).

Table 4: Sector Wise Attribution Analysis for the month of May 2023
SectorPortfolio ContributionBenchmark 1 ContributionDifference
Gas Transmission0.00%-0.13%0.13%
Iron & Steel0.00%-0.06%0.06%
Non – Ferrous Metals0.00%-0.04%0.04%
Media & Entertainment0.04%0.00%0.04%
Plastic Products0.08%0.05%0.03%
Diamond & Jewellery0.06%0.06%0.00%
Ship Building0.00%0.00%0.00%
Consumer Durables0.00%0.06%-0.06%
Capital Goods0.13%0.21%-0.08%
Inds. Gases & Fuels-0.11%-0.02%-0.09%
Construction Materials0.00%0.10%-0.10%
Crude Oil0.00%0.17%-0.17%
Automobile & Ancillaries0.18%0.50%-0.32%

Disclaimer – The information contained in this update is provided by our fund accounting platform and is not audited.

Among The Most Successful Professionals In Equities; Rated The #1 Technology Sector Analyst In Institutional Investors Polls For A Decade. Highly Respected Among Peers For His Path-Breaking Work And Thought Leadership. Rose From An Associate To Managing Director Within A Span Of Six Years In The Investment Banking Industry

Twenty Years Of Experience Building Top Research Franchises: Seven Years As Managing Director And The Global Head Of Technology At JP Morgan, Six Years As Director And Head Of Asia Pacific Technology At Credit Suisse And Five Years As Founder Of Equirus SecuritiesTrack Record Of Innovation And Excellence In Equity Research

Anchored The Rise Of Credit Suisse  From An Unknown Name In Asian Equities To A Number One Ranked Firm In Asian Equities; Head Of Asia Pacific Tech Research

Credited For Building Top Ranked Global As Well As Asian Tech Research Practice At JP Morgan As MD And Global Head Of Tech Research; Made Defining Contribution To Enable JPMorgan To Move From An Also-Ran Player To A Top Global Name In Equity Research

Built A Very Profitable And Award Winning Indian Equity Business At Equirus From Scratch On A Tiny Budget; Achieved Number Two Ranking In Asia For Idea Performance

Impeccable Track Record Of Identifying True Long Term Winners Ahead Of Others Including Samsung Electronics, TSMC, Infosys And TCS And Guiding Investors To Stay Clear Of Laggards Such As UMC And SMIC Years Ahead Of Consensus.

Mind Of An Engineer, Worked In A Team That Designed The World’s Fastest Microprocessor With A Manta “Paranoia Is The Safest Frame Of Mind”. Awarded Two US Patents.

Work Experience Of Designing The World’s Fastest Microprocessors Based On Cutting Edge Technology For Which He Jointly Holds Two US Patents

Best In Class Business Education From The World Renowned Business School: Double Major In Economics And Finance, Beta Gamma Sigma Cum Laude From The University Of Chicago Booth. Excelled In Studies Under World Renowned Faculty Such As Dr. Raghuram Rajan, Former Governor Of The Reserve Bank Of India