Latest news with #ICICIPrudential
Arabian Post
a day ago
- Business
- Arabian Post
Analysts in India Redefine Equity Strategy Edge
Foreign institutional investor activity has slowed, but India's equity market is gaining a new level of sophistication thanks to the rapid emergence of long‑short strategies among domestic analysts. With regulatory approval of the Specialised Investment Fund route and increasing recognition of sell‑side research, analysts in India are setting new standards, outperforming peers in major global markets. At the centre of this shift are flagship long‑short funds, enabled by an April amendment that allowed mutual funds to engage in both long and short equity positions via the SIF framework. Industry leaders such as ICICI Prudential, SBI, Quant and ITI Mutual Funds are among the first to roll out these products. This structural innovation, viewed by asset managers as a game‑changer, allows strategic hedging and enhanced alpha generation in volatile conditions. Jatinder Pal Singh, CEO of ITI Mutual Fund, identifies the move as a watershed moment: 'We see a lot of potential in this category similar to what we have seen in alternative investment funds…'. Quantitative and hedge fund entrants—AlphaGrep, Abakkus and Carnelian—are also applying for SIF licences, signalling a rising tide of systematic strategies. ADVERTISEMENT The surge in long-short offerings emerges against a backdrop of changing investor sentiment and derivative market structures. While proprietary traders and retail continue to dominate derivatives trading—accounting for 52.3% and 33.6% respectively—domestic institutional participation remains minimal at just 0.2%. The launch of these funds is expected to usher in broader institutional adoption, reducing reliance on speculative flows. Simultaneously, foreign players are reassessing their exposure. Citigroup downgraded Indian equities to 'neutral' citing stretched valuations and slower earnings growth. Bank of America has flagged valuation concerns as part of seven headwinds to near‑term market performance, though it remains bullish on India's long‑run structural strengths. Morgan Stanley echoes this optimism, describing the market as undervalued and promising for patient investors. At the nexus of these developments, sell‑side analysts play a pivotal role. Their long‑short models provide more nuanced insights, enabling differentiated strategies compared to conventional long‑only approaches. This evolution mirrors practices in advanced markets, where close analyst coverage is integral to informed decision‑making. International observers are taking note. Carson Block, known for his critical research into Chinese markets, is considering launching a long‑short or long‑only fund in India, citing opportunities in corporate transparency and leveraging tax-friendly jurisdictions like GIFT City. His interest signals growing confidence in the depth and potential of India's equity ecosystem. The broader equities landscape reflects these shifts. Foreign institutional investors are ramping up bearish positions in derivatives, signalling caution amid valuation concerns and global uncertainties. Concurrently, new equity supply is expanding, with a surge in IPOs and share sales reflecting a 14% rise in benchmark indices over the preceding six months. Analysts warn that without strong institutional demand, this wave may trigger volatility. ADVERTISEMENT Experts argue the timing could not be better for long‑short funds. As valuations plateau and geopolitical uncertainty remains — including Middle East tensions affecting crude prices — the ability to manage risk through hedging becomes decisive. Fund managers are betting that structured strategies will better manage these headwinds. At the same time, India's growing affluent class—from double‑digit income growth to rising equity allocation—adds tailwinds. Wealth managers like 360 One are expanding advisory services amid rising assets under management, reflecting the country's broader push toward financial sophistication. The development of long‑short funds aligns with these trends, offering differentiated solutions to high‑net‑worth investors seeking yield in uncertain markets. Yet challenges remain. Institutional engagement in derivatives must scale meaningfully to support product viability. Regulators and market infrastructure will need to adapt, ensuring transparency and risk‑management frameworks keep pace. Moreover, investor education is critical; long‑short strategies are complex and require a clear understanding of leverage, margin risk and counterparty exposures. Nonetheless, the direction is clear: Indian equity markets are transitioning from conventional long‑only investing to embrace multi‑directional strategies, leveraging deep local research and structural innovation. With the SIF framework opening doors for long‑short funds, analysts are stepping into roles once reserved for global peers. As Citi tones down enthusiasm and global investors tread cautiously, India's analysts are sharpening tools that could redefine the domestic landscape—and perhaps export this model abroad.
Economic Times
2 days ago
- Business
- Economic Times
Is momentum only about price? ICICI Prudential wants to redefine momentum investing
Traditional momentum investing has long chased rising stock prices, often falling prey to market euphoria and speculation. ICICI Prudential AMC is challenging this approach with its newly launched Active Momentum Fund, which prioritizes earnings momentum over pure price trends. ADVERTISEMENT Fund Manager Manasvi Shah argues that sustainable momentum stems from strengthening earnings trajectories rather than temporary price surges. This earnings-driven strategy aims to capture intrinsic value drivers while avoiding sentiment-based pitfalls. By leveraging strong research capabilities to distinguish between sustainable earnings momentum and fleeting market excitement, ICICI Prudential positions this fund as an "all-weather equity strategy" that can work across market cycles—potentially establishing a new paradigm in India's mutual fund landscape. Since the strategy focuses on capturing momentum in company or sector earnings, it is designed as an all-weather equity strategy. Historically, across market cycles, certain companies and sectors with stronger earnings trends tend to outperform the broader market. An earnings-revision-based approach, like ICICI Prudential Active Momentum, is inherently cycle-agnostic. Momentum investing, particularly with an earnings focus, is still relatively nascent in the Indian mutual fund space but has significant potential to evolve into a major category over the coming years. While momentum is often driven by sentiment or speculation, our fund avoids non-fundamental triggers. The core focus is on earnings momentum, because ultimately, earnings drive intrinsic value—and, consequently, stock prices. ADVERTISEMENT Because the strategy centers on earnings momentum, it avoids the influence of non-fundamental factors like temporary sentiment shifts or market noise. Generally, earnings trends are more sustainable than price movements. Our in-house research helps us differentiate between genuine earnings momentum and fleeting spikes, allowing for more informed stock follow a blend of bottom-up and top-down approaches. Momentum shifts across sectors and companies over time. Even in sectors where broader momentum is weak, some companies may be executing well and showing strong earnings trends. We aim for diversification across sectors and market capitalizations. While sectoral skews may occur, high concentration is unlikely. ADVERTISEMENT Any macro or micro trigger that could impact earnings trajectories is a critical consideration. Since this is an actively managed fund, without fixed rebalancing cycles, we maintain the flexibility to respond swiftly to such events when they influence momentum. The fund is capitalization-agnostic—we will invest wherever we find strong earnings momentum, whether in large, mid, or small caps, subject to maintaining portfolio liquidity. That's why our benchmark is the Nifty 500, rather than Nifty 50 or Nifty Midcap 150. ADVERTISEMENT This is a cycle-agnostic strategy that focuses on earnings revisions, which historically work across cycles. While pure momentum may falter during short-term volatility, earnings-based momentum tends to be stickier, making the approach more reliable. There's no fixed rebalancing schedule—we act as needed. While price-only momentum funds tend to churn more due to volatility, focusing on earnings provides greater stability and helps control turnover and costs. Price-based momentum is more vulnerable in corrections. But earnings-focused strategies often hold up better, as companies with strong earnings trends tend to decline less. If earnings momentum weakens across the board, the fund has the flexibility to raise cash within defined limits. This combination of stock selection and cash allocation is key to managing downside and generating long-term alpha. ADVERTISEMENT
Time of India
2 days ago
- Business
- Time of India
Is momentum only about price? ICICI Prudential wants to redefine momentum investing
Edited excerpts from a chat with the fund manager: Q: What makes this the right time to launch a momentum-based fund? Are current market conditions supportive, or is this a bold bet against the tide? Live Events Q: You focus on both price and earnings momentum. What's the secret sauce in your proprietary model? Do you tilt more toward one or is it a dynamic mix? Q: Can you walk us through how the model identifies "sustainable momentum" versus short-lived euphoria? Q: How do you guard against sector overexposure in a momentum-based strategy? Q: What role do macro triggers like rate cycles, elections, or global events play in your strategy? Q: What role do small and midcap stocks play, especially since momentum often builds faster in those segments? Q: Investors are always chasing alpha. Can this fund consistently beat benchmarks, or is momentum too cyclical? Q: How often do you churn the portfolio? Does momentum require higher turnover, and how do you manage the costs? Q: Momentum investing can struggle in market corrections. How does the fund manage drawdowns? (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Traditional momentum investing has long chased rising stock prices, often falling prey to market euphoria and speculation. ICICI Prudential AMC is challenging this approach with its newly launched Active Momentum Fund, which prioritizes earnings momentum over pure price Manager Manasvi Shah argues that sustainable momentum stems from strengthening earnings trajectories rather than temporary price surges. This earnings-driven strategy aims to capture intrinsic value drivers while avoiding sentiment-based leveraging strong research capabilities to distinguish between sustainable earnings momentum and fleeting market excitement, ICICI Prudential positions this fund as an " all-weather equity strategy " that can work across market cycles—potentially establishing a new paradigm in India's mutual fund the strategy focuses on capturing momentum in company or sector earnings, it is designed as an all-weather equity strategy. Historically, across market cycles, certain companies and sectors with stronger earnings trends tend to outperform the broader market. An earnings-revision-based approach, like ICICI Prudential Active Momentum, is inherently investing, particularly with an earnings focus, is still relatively nascent in the Indian mutual fund space but has significant potential to evolve into a major category over the coming momentum is often driven by sentiment or speculation, our fund avoids non-fundamental triggers. The core focus is on earnings momentum, because ultimately, earnings drive intrinsic value—and, consequently, stock the strategy centers on earnings momentum, it avoids the influence of non-fundamental factors like temporary sentiment shifts or market noise. Generally, earnings trends are more sustainable than price movements. Our in-house research helps us differentiate between genuine earnings momentum and fleeting spikes, allowing for more informed stock follow a blend of bottom-up and top-down approaches. Momentum shifts across sectors and companies over time. Even in sectors where broader momentum is weak, some companies may be executing well and showing strong earnings trends. We aim for diversification across sectors and market capitalizations. While sectoral skews may occur, high concentration is macro or micro trigger that could impact earnings trajectories is a critical consideration. Since this is an actively managed fund, without fixed rebalancing cycles, we maintain the flexibility to respond swiftly to such events when they influence fund is capitalization-agnostic—we will invest wherever we find strong earnings momentum, whether in large, mid, or small caps, subject to maintaining portfolio liquidity. That's why our benchmark is the Nifty 500, rather than Nifty 50 or Nifty Midcap is a cycle-agnostic strategy that focuses on earnings revisions, which historically work across cycles. While pure momentum may falter during short-term volatility, earnings-based momentum tends to be stickier, making the approach more no fixed rebalancing schedule—we act as needed. While price-only momentum funds tend to churn more due to volatility, focusing on earnings provides greater stability and helps control turnover and momentum is more vulnerable in corrections. But earnings-focused strategies often hold up better, as companies with strong earnings trends tend to decline less. If earnings momentum weakens across the board, the fund has the flexibility to raise cash within defined limits. This combination of stock selection and cash allocation is key to managing downside and generating long-term alpha.
Economic Times
4 days ago
- Business
- Economic Times
Mukul Agrawal picks 1.28% stake in this underperforming stock, drives 14% surge
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Shares of Tatva Chintan Pharma Chem , a long-time underperformer currently down 65% from its peak, jumped 13.6% in intraday trade today to Rs 1,062.70 on the BSE after prominent investor Mukul Agrawal acquired a 1.28% stake in the of the updated shareholding pattern for the quarter ended June 2025, the star investor has bought 3 lakh shares of the company, representing a 1.28% equity stake Agrawal's name did not feature in the shareholding pattern available for the January-March quarter, which means either this is an entirely fresh infusion of capital, or he held a <1% stake in the company, which does not require any the end of the said quarter, the promoters and the promoter group of the company hold a 72% stake in the company, while the remaining 28% rests in the hands of the public domestic mutual funds have slightly reduced their stake in the company, lowering it to 5.07% in June from 5.34% in March. ICICI Prudential has decreased its holding, which now stands at 1.79%, down from 2.03% Sachs, through the Goldman Sachs India Equity Portfolio, maintained a 2.59% stake in Tatva Chintan as of the end of the June Chintan Pharma Chem was incorporated in 1996, and it is a manufacturer of a diverse portfolio of structure-directing agents, phase transfer catalysts, electrolyte salts for batteries, and pharmaceutical and agrochemical intermediates and other specialty shares of Tatva Chintan Pharma Chem have fallen by 6.88% in the last year, but have surged by 21.4% in the current calendar year so far. On a 6-month basis, the stock has rallied by 21%.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Time of India
4 days ago
- Business
- Time of India
Mukul Agrawal picks 1.28% stake in this underperforming stock, drives 14% surge
Shares of Tatva Chintan Pharma Chem , a long-time underperformer currently down 65% from its peak, jumped 13.6% in intraday trade today to Rs 1,062.70 on the BSE after prominent investor Mukul Agrawal acquired a 1.28% stake in the company. As of the updated shareholding pattern for the quarter ended June 2025, the star investor has bought 3 lakh shares of the company, representing a 1.28% equity stake . Explore courses from Top Institutes in Select a Course Category Cybersecurity Operations Management Management Project Management Digital Marketing Finance PGDM Product Management Data Science others Design Thinking CXO healthcare Degree MBA Leadership Data Science MCA Technology Others Healthcare Public Policy Artificial Intelligence Skills you'll gain: Duration: 10 Months MIT xPRO CERT-MIT xPRO PGC in Cybersecurity Starts on undefined Get Details Agrawal's name did not feature in the shareholding pattern available for the January-March quarter, which means either this is an entirely fresh infusion of capital, or he held a <1% stake in the company, which does not require any disclosure. At the end of the said quarter, the promoters and the promoter group of the company hold a 72% stake in the company, while the remaining 28% rests in the hands of the public shareholders. India's domestic mutual funds have slightly reduced their stake in the company, lowering it to 5.07% in June from 5.34% in March. ICICI Prudential has decreased its holding, which now stands at 1.79%, down from 2.03% previously. Goldman Sachs, through the Goldman Sachs India Equity Portfolio, maintained a 2.59% stake in Tatva Chintan as of the end of the June quarter. Tatva Chintan Pharma Chem was incorporated in 1996, and it is a manufacturer of a diverse portfolio of structure-directing agents, phase transfer catalysts, electrolyte salts for batteries, and pharmaceutical and agrochemical intermediates and other specialty chemicals. The shares of Tatva Chintan Pharma Chem have fallen by 6.88% in the last year, but have surged by 21.4% in the current calendar year so far. On a 6-month basis, the stock has rallied by 21%. Also read: Motherson Sumi, Samvardhana Motherson International shares rise up to 4% on bonus share issue record date ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
