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Economic Times
2 days ago
- Business
- Economic Times
Alternative managers gaining ground: 70% of PMS capital now with non-institutional players, says Manish Bhandari
Edited excerpts: Kshitij Anand: I wanted to understand from you—the geopolitical environment is changing, and it's changing faster than we could have imagined. New tariff rules are coming in, and China is playing its own game. How do you think everything is shaping up at this point in time—good for India, bad for India? Live Events Kshitij Anand: And although there will be people at home who may not welcome or appreciate this India–China development—let's not get into that, as it's more political than financial—economically, we stand to benefit from the partnership? Kshitij Anand: Now, let's talk about sectors. How do you view the sectoral landscape for the next few years? What could be the alpha generators of the future? Kshitij Anand: We've seen new-age businesses gaining traction over the past few years. IPOs have slowed, but the SME space is booming—over 600 IPOs have been listed. Any new thematic businesses catching your eye? Kshitij Anand: On PMS—the industry has evolved rapidly, especially post-COVID, with significant inflows. We're also seeing new strategies launched frequently. Is this good or bad for the industry? (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel In an exclusive conversation with ETMarkets PMS Talk on the sidelines of the APMI conference in Mumbai, Manish Bhandari , CEO & Portfolio Manager at Vallum Capital, highlighted a transformative shift in India's portfolio management services (PMS) to Bhandari, who is also a Board Member of the Association of Portfolio Managers in India (APMI), nearly 70% of institutional capital in the PMS space is now managed by players without traditional institutional backing—a sign that investors increasingly trust independent and boutique managers over large fund attributes this trend to the sector's growing openness, diversity of strategies, and the 'democratization' of money management, where talent and performance are beginning to outweigh brand name and absolutely—and that's the beauty of the geopolitical landscape—it changes so fast. When Trump came in, everyone thought we would have an edge because of our long-standing relationship, but that has not materialised in terms of outcomes, and a different scenario is now interesting and brewing today, in my view, is a new, very solid economic partnership that's taking shape. There has always been a relationship between India and Russia, but now, with China, everything seems quite positive, and we are making inroads to create a favourable such a large economic bloc comes together, strong markets open up for each other, and cooperation increases. While there is a structural headwind until the tariff issue between India and the USA is resolved, there is also a structural long-term dividend if this partnership this morning, we heard that the National Security Advisor flew to Russia—such visits are now frequent and widely publicised. Perhaps the frustration in America is partly due to this new economic bloc being built. I deliberately use the word 'economic bloc' because my focus is on economic progress and structural changes—not cultural aspects—which are secondary. My sense is that Russia has played a key role in bringing India and China human brain holds on to baggage for a long time, but as the narrative changes, that baggage will also change. I believe this shift is happening before our eyes, and it's in both governments' interests to make it work. I see progress daily. As it surfaces on the front pages of newspapers, public perception will also can change overnight—10%, 20%, 25%—so making a definitive prognosis would require being smarter than the US President's tweets, which I'm not, and I'm sure none of us are. To make a compelling investment bet, you need two things: a rising sector and reasonable valuations. A great story with stretched valuations doesn't work. Infrastructure spending seems to have picked up again after a difficult election year. Cement looks promising. Healthcare also remains evergreen. The US still has significant dependence on Indian healthcare, so despite any market pushback, Indian companies have strong growth all of those 600 IPOs are new-age businesses. For me, 'new age' means traditional businesses enhanced by technology to grow faster and disrupt incumbents. These are scattered across small and midcaps, and need to be picked selectively. Auto ancillary is another 'old school' sector with new opportunities coming India's way. Currently, opportunities are dispersed across sectors—there's no single dominant theme like we saw in previous expansion of the market is always good for the industry—there is no second thought about it. There are a lot of strategies emerging because it is quite a democratic system where anyone who aspires to manage external or third-party money can get in today. Otherwise, for decades, the only platform left was to get a job in a mutual fund, and launching your own mutual fund was next to it is quite a democratic expression of investing—different strategies, different ways of looking at the market—everything keeps competition at a reasonably high level, and everyone can learn from each other. I think it is of the growth has also come from EPFO capital and less from retail capital. But one thing I can tell you, which is very interesting, is that if you look at the PMS industry and landscape, and the advisory capital that has been built, 70% of the institutional capital is given to people who have a non-institutional background. They are not backed by large mutual fund-type sets the context that people are giving money to individuals to manage—they are not just looking for institutions. So, individuals can make a remarkable difference.I see this trend coming up significantly, where institutional capital will look for PMS managers or alternative managers—something that has happened in other parts of the world as well.: 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
2 days ago
- Business
- Time of India
Alternative managers gaining ground: 70% of PMS capital now with non-institutional players, says Manish Bhandari
Edited excerpts: Kshitij Anand: I wanted to understand from you—the geopolitical environment is changing, and it's changing faster than we could have imagined. New tariff rules are coming in, and China is playing its own game. How do you think everything is shaping up at this point in time—good for India, bad for India? Live Events Kshitij Anand: And although there will be people at home who may not welcome or appreciate this India–China development—let's not get into that, as it's more political than financial—economically, we stand to benefit from the partnership? Kshitij Anand: Now, let's talk about sectors. How do you view the sectoral landscape for the next few years? What could be the alpha generators of the future? Kshitij Anand: We've seen new-age businesses gaining traction over the past few years. IPOs have slowed, but the SME space is booming—over 600 IPOs have been listed. Any new thematic businesses catching your eye? Kshitij Anand: On PMS—the industry has evolved rapidly, especially post-COVID, with significant inflows. We're also seeing new strategies launched frequently. Is this good or bad for the industry? (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel In an exclusive conversation with ETMarkets PMS Talk on the sidelines of the APMI conference in Mumbai, Manish Bhandari , CEO & Portfolio Manager at Vallum Capital, highlighted a transformative shift in India's portfolio management services (PMS) to Bhandari, who is also a Board Member of the Association of Portfolio Managers in India (APMI), nearly 70% of institutional capital in the PMS space is now managed by players without traditional institutional backing—a sign that investors increasingly trust independent and boutique managers over large fund attributes this trend to the sector's growing openness, diversity of strategies, and the 'democratization' of money management, where talent and performance are beginning to outweigh brand name and absolutely—and that's the beauty of the geopolitical landscape—it changes so fast. When Trump came in, everyone thought we would have an edge because of our long-standing relationship, but that has not materialised in terms of outcomes, and a different scenario is now interesting and brewing today, in my view, is a new, very solid economic partnership that's taking shape. There has always been a relationship between India and Russia, but now, with China, everything seems quite positive, and we are making inroads to create a favourable such a large economic bloc comes together, strong markets open up for each other, and cooperation increases. While there is a structural headwind until the tariff issue between India and the USA is resolved, there is also a structural long-term dividend if this partnership this morning, we heard that the National Security Advisor flew to Russia—such visits are now frequent and widely publicised. Perhaps the frustration in America is partly due to this new economic bloc being built. I deliberately use the word 'economic bloc' because my focus is on economic progress and structural changes—not cultural aspects—which are secondary. My sense is that Russia has played a key role in bringing India and China human brain holds on to baggage for a long time, but as the narrative changes, that baggage will also change. I believe this shift is happening before our eyes, and it's in both governments' interests to make it work. I see progress daily. As it surfaces on the front pages of newspapers, public perception will also can change overnight—10%, 20%, 25%—so making a definitive prognosis would require being smarter than the US President's tweets, which I'm not, and I'm sure none of us are. To make a compelling investment bet, you need two things: a rising sector and reasonable valuations. A great story with stretched valuations doesn't work. Infrastructure spending seems to have picked up again after a difficult election year. Cement looks promising. Healthcare also remains evergreen. The US still has significant dependence on Indian healthcare, so despite any market pushback, Indian companies have strong growth all of those 600 IPOs are new-age businesses. For me, 'new age' means traditional businesses enhanced by technology to grow faster and disrupt incumbents. These are scattered across small and midcaps, and need to be picked selectively. Auto ancillary is another 'old school' sector with new opportunities coming India's way. Currently, opportunities are dispersed across sectors—there's no single dominant theme like we saw in previous expansion of the market is always good for the industry—there is no second thought about it. There are a lot of strategies emerging because it is quite a democratic system where anyone who aspires to manage external or third-party money can get in today. Otherwise, for decades, the only platform left was to get a job in a mutual fund, and launching your own mutual fund was next to it is quite a democratic expression of investing—different strategies, different ways of looking at the market—everything keeps competition at a reasonably high level, and everyone can learn from each other. I think it is of the growth has also come from EPFO capital and less from retail capital. But one thing I can tell you, which is very interesting, is that if you look at the PMS industry and landscape, and the advisory capital that has been built, 70% of the institutional capital is given to people who have a non-institutional background. They are not backed by large mutual fund-type sets the context that people are giving money to individuals to manage—they are not just looking for institutions. So, individuals can make a remarkable difference.I see this trend coming up significantly, where institutional capital will look for PMS managers or alternative managers—something that has happened in other parts of the world as well.: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
Economic Times
2 days ago
- Business
- Economic Times
ETMarkets PMS Talk: Indian equities fairly valued but need earnings boost, says Sanjay Chawla
Tired of too many ads? Remove Ads Thanks for taking the time out. With Washington's additional 25% levy—doubling U.S. tariffs on Indian goods to a punitive 50% - how are you reading into this for Indian Inc.? Tired of too many ads? Remove Ads Do you think with external headwinds the process of generating alpha will be more challenging? How are reading into June quarter results of India Inc.? Tired of too many ads? Remove Ads What is your call on valuations? We have some moderation from all-time highs but can we say that we are in the attractive zone? Foreign institutional investors have unleashed a brutal $4.17 billion selloff across five key sectors in July. FIIs turned net sellers to the tune of Rs 17,741 crore last month. Should Indian investors be cautious? Retail investors have played an important role in holding the market. But rising risk could pose a threat? From a retail perspective, do you agree that money could start moving towards fixed income space as volatility grips D-Street? Which sectors look attractive? In the latest edition of ETMarkets PMS Talk Sanjay Chawla , Chief Investment Officer – Equity at Baroda BNP Paribas Mutual Fund , shared his views on the current state of Indian equities , global headwinds, and sectoral he believes the markets are trading around their long-term averages, Chawla emphasised that a sustained earnings pickup will be crucial to justify downplayed the impact of recent U.S. tariff hikes on Indian exports, highlighting that the affected sectors form an insignificant part of the equity also touched upon the resilience of retail investors, the temporary nature of foreign portfolio outflows, and the potential in consumption and healthcare segments, even as geopolitical and macroeconomic uncertainties persist. Edited Excerpts –From a macro perspective, Indian exports to the US accounts less than almost half a percent of the GDP. Then there are certain sectors which are exempted. So the net-net impact would be even is of course assuming the most pessimistic scenario of exports coming to a complete standstill. That is not our base fact that most countries would have some tariffs would mean that India may not be economically at a disadvantageous the sectors which are likely to get impacted are not material part of equity Indices, the impact on the earnings is unlikely to be meaningful. However, the impact may be on a bottom-up basis and more from a sentiment by the trade negotiations with the other countries, I think the tariffs may settle down on a much lower are a couple of headwinds- trade barriers, global economic uncertainties, supply chain disruption, geo-political simmering at multiple locations. All these factors are leading to heightened of the factors are difficult to model in a traditional financial sense. As long as one stays focus on long term fundamental factors and usually ignores the 'noise' and manages the volatility, they would perhaps do date we have seen about 80% of the companies have reported their earnings. The PAT growth continues to be in single digit. While the earnings are aligned to expectations, the requisite run rate would be higher in coming quarters. It augurs well that festive seasons this time are well spread and come in earlier. It is expected that earnings may improve in the coming Indian markets are trading at long term averages. To make strong investment arguments at current valuations we need to see earnings improve from here so far have been in mid-single digits. Ground feedback from festive demand seems to be indicating a much better outlook. If that sustains and is reflected in earnings in coming quarters then current valuations may be have been overweight on India for a long time. Recent outflows may plausibly be on account of redemptions, or profit booking or alternative markets being cheaper and offering better potential the past also we have seen FPIs selling in the short term only to do a U turn once global factors this juncture, Indian markets tick almost all boxes from a global investor perspective: Good economic growth, stable currency, deficit under control, visible earnings growth and breath of investible opportunity can be assumed to be the global uncertainty the only factor against Indian investment is slower than historic earnings growth. Once that picks up we may see renewed interest by overseas is no denying the fact that retail investors have shown remarkable resilience and maturity and have been steadfast in their financial goals.I think they understand the difference between systematic risk (in terms of GDP, earnings and valuations) and unsystematic risk (global policy uncertainty and geopolitical tensions).They understand that eventually the domestic economy will do well leading to improved earnings. That is what they hope to capture by investing in Indian equity is very important to do your asset allocation and have the discipline to stick to the same to meet your financial goals. Risk appetite for equity investors is different from Fixed income investors. That is what is eventually reflected in potential recent tepid returns from equity markets is an outcome of heightened global uncertainty. Once the dust settles we should see earnings growth tracing the nominal sector, especially discretionary consumption, should see a pickup. First the personal tax cuts should increase the disposable income of the middle-class. Secondly, we usually see higher spending during festive. We hope to see the same trend Healthcare sector also offers interesting pockets of growth- Hospitals are expanding through brown field expansion, domestic demand is potentially stable. Opportunity in Contract Manufacturing (CMO) can be very is notwithstanding the potential tariff barriers. However, we suggest that investors should consult their financial advisor and according to their risk appetite consider the above sectors.: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
Time of India
06-05-2025
- Business
- Time of India
ETMarkets PMS Talk: Karan Aggarwal on India's 10-year wealth themes - Banks, infra & financial inclusion to lead
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads In this episode of ETMarkets PMS Talk, we speak with Karan Aggarwal , Co-Founder and CIO at Elever, a quant-based PMS, who shares his insights on India's evolving investment landscape and the factors shaping long-term wealth India navigates global volatility and prepares for its next growth cycle, Aggarwal identifies banks , infrastructure, and financial inclusion as the key pillars that will drive the country's wealth story over the next the tactical success of the Elever FactorShields Fund, which delivered 20% returns in FY25, to sharp views on the US-led macro shifts and sector rotation strategies, Aggarwal outlines how investors can align portfolios for stability and long-term alpha. Edited Excerpts –A) EleverShields has delivered around 20% in total returns over FY 2025 while benchmark has delivered around 11% during the same are in market correction since Sep 2024 and EleverShields has delivered losses of around 7% during same period vis-à-vis losses of around 11% for the benchmark. Strategy outperformed benchmark in 7 out of 12 underperformance of around 2% came in month of EP 2024, a month marked with extreme bullish movement.A) 20% returns translate to gains of INR 10 Lakhs on investment of INR 50 Lakhs. In this hypothetical scenario, investor would have sitting at corpus of INR 60 Lakhs.A) Elever FactorShields provides tactical exposure to relatively low-risk factors such as low volatility, dividend, quality, and value, with 100% allocation restricted to the top 200 companies listed on the NSE (midcap and large-cap space).Portfolio building involves a two-step process. In the first step, individual factor portfolios are constructed around multiple factors with the goal of alpha maximization. Each of these factor portfolios is designed to outperform the broader markets over a holding period of 10-15 there is significant divergence in the alpha behaviour of different factors. For example, alpha expansion for the low volatility and dividend factors is typically maximized during bearish market conditions, while alpha for the momentum factor is maximized during bullish market the other hand, factors like quality provide consistent but relatively lower alpha across market conditions. Essentially, each factor has its own risk profile and alpha strategy improves risk-adjusted returns by rotating across alpha-maximizing factors in line with market a tactical rotation model, a market call is made, and based on that call, suitable factor portfolios are selected to build the final portfolio. In a nutshell, the strategy is a "fund of factor portfolios."In FactorShields, exposure is restricted to low-risk factors like low volatility and dividend during bearish phases. During market consolidation or bullish phases, the allocation is increased to moderate-risk factors such as quality and strategy is designed to deliver low-risk alpha to investors with a moderate risk profile, without exposure to high-risk factors or stocks outside the top 200 stocks on the NSE.A) We are looking at the end of the nearly half-century status quo where the US was printing currency and buying goods and services from other countries while beneficiary countries were providing a part of earnings back to the US government in the form of debt nearly quadrupling since 2008 GFC and interest payments at around US$ 1.5 Trillion, this economic model is way past its expiry US is expected to opt for 'voluntary recession' in the next 12 months to navigate the biggest debt restructuring exercise in human history and it would create multiple 'volatility ripple' events (we have already seen tariff tantrums) throughout FY can have multiple-degree impacts on the Indian economy as the IT sector is one of the largest sources of white-collar employment with secondary negative impacts on real estate sectors of dollar cities such as Gurgaon/Bangalore and urban said that, relative underperformance of India vis-à-vis global peers in last 6 months of FY 25 has placed it favourably on technical charts in FY 26 and we expect Nifty 50 respect bottom of 21,300-21,800 during global volatility events with sustainable recovery expected from June-July onwards on the back of USD depreciation, low inflation and FII rotation away from have seen some proactive steps from the government/RBI to counter global headwinds with budget tax incentives, RBI rate cuts/liquidity boosters and a potential Indo-US trade we expect the Nifty 50 to make a new high by Diwali 2025, the trajectory of markets would be largely decided by the effectiveness of aforementioned initiatives in neutralizing adverse impact of global disturbances.A) In the medium-term, consumer staples and power utilities look good as they are driven by domestic demand and largely protected against demand rural consumption in India growing at nearly 2x vis-à-vis urban consumption, sectors linked to rural themes such as seeds and fertilizers also seem to be a decent bet for the next few one is looking beyond the next 2 years, Banks and NBFCs stand out as the bank credit to GDP ratio for India is one of the lowest among G20 India is expected to become a middle-income country in the next 15 years, financial inclusion would catch up with other EM peers and these sectors would be natural beneficiaries. Infra is another 10-year story as India looks to cover the infrastructure gap with China over next decade. However, valuations are quite frothy in many sectors despite recent corrections.A) We have been expecting a US volatility spike in April 2025 for the last 6 months. Our models were already showing a partial cash call since Sep 2024 and the March rally gave us an opportunity to lighten the portfolio gradually with nearly 60% cash positions by captured global volatility spikes and triggered risk rotation in 1st week of April and we gradually shifted positions to low-risk factors while deploying the cash strategically to leverage the dips. We still have sufficient cash on books to leverage expected dips in first 15 days of May 2025.A) Typically, all investments follow a standard rule in the long-term – 'High Risk High return, Low Risk Low Return'.For example, savings return 4% as it is zero-risk while FD give 6%-8% as it comes with liquidity risk, Similarly, AAA-rated government bonds provide returns of 8%-9% while low-credit bonds provide returns of 12%-13% as there is default risk with low-credit low-volatility stocks are supposed to underperform broad benchmarks to account for lower risk associated with studies across global markets reveal that in the real world, low volatility stocks tend to outperform broad benchmarks as positive alpha during bear markets is large enough to compensate for negative alpha during bullish phase. This anomaly is globally known as 'low volatility anomaly'.FactorShields improvise on low-volatility anomaly by striving to maximize positive alpha during bear market while maintaining zero or slightly positive alpha during bullish phase, thus enhancing low-risk alpha for investors.A) Factorshields starts with top 200 companies listed on NSE. These stocks have to pass an inversibility filter which sets criteria around market cap, liquidity and free pre-defined factor scoring rules, filtered companies are ranked on various factors such as quality, value, volatility, dividend, alpha, on pre-set security selection and weighing rules around factor scores, factor portfolios are built. Some of the portfolios are a combination of two or more factors and sector/size constraints would also be part of the security selection of these portfolios are managed independently and follow different review the next step, based on output from our proprietary tactical model, a decision is made on which factor portfolios have to be selected and how much weight has to be allocated to each of the selected portfolios which leads to creation of the 'Fund of factor portfolios'.In Factorshields, factor portfolios covering low volatility, dividend, quality and value are considered for selection.A) If we look at back tested data, during 2008 GFC, Nifty 50 went down by around 63% from its 2007 peak while EleverShields cut the losses to 32%.Coming to live data since Oct 2024, while benchmark has lost 9%-10% till Mar 2025, EleverShields restricted the losses to 4%-5%. We would not say that risk is completely eliminated but based on data, it can conclude that risk has been less than standard equity products in the management in EleverShields comes in multiple layers. First of all, lower systematic risk with exposure restricted to low-to-moderate risk risk is also quite limited with exposure limited to top 200 companies on NSE. At model level, tactical models provide insights on factor selection to optimize risk allocation in line with market there are two approaches to manage equity risk. Tactical model provides cash calls which indicate reduction of equity exposure during high volatility periods or periods prone to equity strategically, long positions in index put options are also taken to explicitly hedge market risk.(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
