Latest news with #QodeAdvisors
Mint
3 days ago
- Business
- Mint
Expert view: Market valuation looks stretched; maintain a 5–10% allocation to gold, says Rishabh Nahar of Qode Advisors
Expert view on markets: Rishabh Nahar, Partner and Fund Manager at Qode Advisors, is reducing the overall market exposure and shifting focus to select unique stock ideas where he still sees strong earnings momentum and low volatility, offering a good balance of risk and reward. In an interview with Mint, Nahar shares his views on market valuations, sectors to watch and strategy for gold. Here are edited excerpts of the interview: We are watching the post-Q1 rebound not just as a statistical uptick, but as confirmation of our momentum signals realigning after a brief drawdown. The 4 per cent YTD (year-to-date) gain in the Nifty 50 versus nearly 10 per cent in the S&P 500 and nearly 8 per cent in MSCI EM tells us that Indian mid- and small-caps were oversold earlier in the year. Once breadth improved and volatility cooled, our trend-following algorithms signalled a switch from defensives back into risk-on trades, which helped us capture that steady grind higher through May. Looking ahead, I expect this orderly advance to persist so long as corporate earnings surprises remain positive and global macro risks stay contained. From a risk‐management standpoint, we'll maintain a modest volatility skirt around key support levels and hedge if our downside‐break thresholds are breached, but for now, the models favour staying long the market's run. On valuations, our factor overlays highlight that forward PEs near 20 times sit at multi-year highs, which historically compress future excess returns. Quantitatively, this means our valuation screens are flagging fewer new buys at the index level, and instead we're tilting toward sectors where our earnings-growth forecasts outpace implied growth baked into current prices. In practice, we're lowering our broad‐market risk budget and reallocating it to idiosyncratic ideas, where our earnings‐revision models and low‐volume screens still show attractive risk–reward profiles. In sum, while broad-market returns may settle into mid-single digits from here, a disciplined factor blend and rigorous risk controls should allow us to outperform that baseline. Quarter-four earnings paint a picture of breadth rather than brilliance. Across the top 500 listed companies, median profit after tax advanced roughly 10 per cent quarter-on-quarter while sales rose about 5 per cent, with 69 per cent of firms posting positive profit growth. Crucially, the dispersion favoured the interior of the market-cap curve: mid- and small-cap names delivered profit growth north of 20 per cent, versus low-single-digit advances for large-caps. Factor diagnostics we run internally, profit revision momentum, sales acceleration, and operating-leverage screens, confirm that the earnings pulse is strongest in capital goods, select metals, and telecom, where pricing power and execution gains are translating cleanly into cash flow. At the index level, the Nifty 100 'beat-or-meet' ratio has climbed back to 51 per cent, the best reading since mid-2023. This indicates that analysts' downgrades earlier in the year have finally reset the bar to achievable levels. Taken together, the quarter shows that profit growth is broad-based enough to sustain the cycle, but not yet explosive enough to justify fresh multiple expansion on its own. Looking ahead, the market's next leg higher still hinges on a handful of catalysts that are measurable in our models but uncertain in their timing. Foremost is monetary policy: with headline CPI drifting below the Reserve Bank of India's 4 per cent midpoint, the window has opened for an initial 25- to 50-basis-point cut; a sustained easing cycle would lower discount rates and support rate-sensitive factors such as quality growth and housing proxies. A second variable is the monsoon, which the IMD now projects at 106 per cent of the long-period average. Early rainfall could revive rural purchasing power and lift two-wheeler, FMCG and agro-inputs volumes into the festival season. Third, clarity on US-India trade rules, especially around technology transfer and critical minerals, would help de-risk export-linked earnings streams. Finally, corporate capex intent remains high on survey data but is yet to translate into hard spend; a visible pick-up in order books would underpin earnings trajectories for FY 26-27. Valuations, meanwhile, leave little cushion: the Nifty trades near 22 times forward earnings, or roughly one standard deviation above its decade average, so any disappointment on these triggers could compress multiples. That is why, despite our constructive three- to five-year view on India's structural story, we continue to run fully invested but factor-balanced books tilting toward companies with improving earnings revision momentum, clean balance-sheets and demonstrable pricing power, while hedging outliers through disciplined risk overlays rather than trying to time six- or twelve-month index levels that, in truth, no one can consistently forecast. The Indian defence industry has demonstrated strong engineering capabilities in recent military operations and benefits from steady domestic demand alongside growing export opportunities. While the military-industrial complex is well-positioned to become a significant contributor to the economy, it is challenging to determine whether this optimism is already reflected in current valuations and whether the sector can deliver truly outsized returns going forward. We no longer distinguish between PSU and private banks—both segments have delivered strong returns in the past when operating performance was robust and valuations were attractive. Our focus today is on identifying banks whose future growth prospects are meaningfully underappreciated by the market. At this juncture, we do not see any banking stocks offering that degree of asymmetry. While many banks remain solid businesses, none currently meet the elevated return expectations or risk–reward thresholds we require for new convictions. One compelling growth driver is the ongoing US–China trade tensions, which have spurred higher import tariffs and stricter regulatory scrutiny on Chinese pharmaceutical suppliers. India's well-established API manufacturing base, combined with a rising focus on differentiated products and biosimilars, positions Indian pharma companies to capture these displaced volumes in regulated markets. By moving up the value chain—from pure generics to high-complexity formulations and speciality injectables—Indian firms can secure premium pricing, deepen customer relationships, and meaningfully increase their US market share over the next two years. We advocate maintaining a 5–10 per cent strategic allocation to gold across all time horizons. This positioning serves as an effective hedge against inflation, negative real rates, and geopolitical uncertainty. We recommend adding to positions on meaningful pullbacks, as even a modest allocation can help dampen the volatility of an equity-heavy portfolio. Read all market-related news here Read more stories by Nishant Kumar Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions, as market conditions can change rapidly, and circumstances may vary.
Economic Times
23-05-2025
- Business
- Economic Times
ETMarkets PMS Talk: India's growth + global devaluation = next bull market - Qode's FY26 outlook
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads India's structural growth story combined with the looming threat of global currency devaluation could be the perfect recipe for the next big bull run in equities, says Rishabh Nahar, Partner and Fund Manager at Qode Advisors, in this edition of ETMarkets PMS an exclusive interaction, Nahar shares how Qode's quant-driven strategies helped their Tactical and All Weather Funds outperform the BSE 500 TRI in a strong emphasis on risk management , data-backed decision-making, and selective risk-taking, Qode's approach focuses on consistent outperformance, particularly during volatile or bearish managing downside through gold and puts, to identifying high-conviction growth stocks, Nahar explains why volatility isn't risk—and why India is uniquely positioned for long-term equity market gains as global macro headwinds continue to shift. Edited Excerpts –A) We specialise in risk management, and that played out well for us. We protect the portfolios with an element of gold as well as protection using puts. We were rewarded because of having these positions and Qode All weather and Tactical portfolios are pure quant portfolios designed to outperform during bear markets. We have a strong risk management framework in place. Since last year, markets (especially mid- and small-caps) have been elevated, and we were in a risk-off in the last few months have we taken some risk on these portfolios. All these decisions are not made subjectively. We have a pure data-driven approach and have done extensive testing with a deep understanding of markets.A) Our portfolios are designed to weather bad months or large amounts of volatility. The Qode All Weather, as the name suggests, is designed to see lower drawdowns and outperform during bad did not make any tactical changes, since we are a quant fund our models are designed taking years of data that have seen situations like this in the past.A) With all weather and tactical, we try to maintain a low beta, but when markets are beaten down and businesses are available at attractive valuations, we are willing to take on risk. We are not afraid to take risk- when the situation is favourable. Our outperformance will come by protecting downside in bad years. To explain this, here is a simple example:The above table easily shows how drawdowns could affect your returns.A) With Qode Growth Fund and Qode Future Horizons, we are looking at buying businesses that are showing strong earnings momentum. In the Growth Fund, we hold a 30-stock portfolio with an average market cap of 8000 are fairly strong businesses that have shown great execution capabilities in the past. But due to the size of the businesses being smaller, the stock price sees more Future Horizon, we are looking to hold 10-12 fundamentally strong businesses with immense growth potential. This is a more concentrated portfolio because we have a lot of conviction in our understand the business in depth and take a large position in each of them. Because of the larger position sizes, the volatility is higher, but we do not consider volatility as risk.A) Qode Growth Fund, Qode All Weather and Qode Tactical are pure quant funds. Businesses and ETFs are picked based on factors that we think lead to EPS are three pillars we work around: 1. What to buy (fundamentally strong businesses) 2. When to buy (Valuations) and 3. How much to buy (position sizing)All our quant models are built around this framework. All three strategies are built with a data-driven fourth strategy, Qode Future Horizon – we are looking at a quantamental framework because there are lots of great businesses with scattered data or data that's not look to meet the management and understand the business by taking a deep dive individually in each business.A) Our macro view remains fixed at the growth story for India and Equity markets. With the US debt crisis coming closer, a large amount of US debt is maturing in the next four years. Money printing and devaluation will be a large factor for equities to do money printing/devaluation plus a strong position for India will fuel the next bull market . Having exposure to assets like equities/gold and real estate (mostly land) will be a key component for individuals to maintain/grow their wealth.A) We refrain from having such a short-term outlook because markets are a complex place, and in the short run, factors like demand/supply, war, and trade policies will have a larger impact on their movement. Even if we could model all these factors there is no significant upside for anyone to have a view on the markets for a quarter or two.A) We are sector/ theme agnostic. We look for fundamentally strong businesses that have a long runway for earnings growth and promoters that have excellent execution like to own owner-operated businesses with strong brand names and high ROCE's. Most of the businesses we own are completely debt-free and have had a strong earnings momentum.(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
Time of India
23-05-2025
- Business
- Time of India
ETMarkets PMS Talk: India's growth + global devaluation = next bull market - Qode's FY26 outlook
India's structural growth story combined with the looming threat of global currency devaluation could be the perfect recipe for the next big bull run in equities, says Rishabh Nahar, Partner and Fund Manager at Qode Advisors, in this edition of ETMarkets PMS Talk. In an exclusive interaction, Nahar shares how Qode's quant-driven strategies helped their Tactical and All Weather Funds outperform the BSE 500 TRI in April. With a strong emphasis on risk management , data-backed decision-making, and selective risk-taking, Qode's approach focuses on consistent outperformance, particularly during volatile or bearish phases. Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track default , selected Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. From managing downside through gold and puts, to identifying high-conviction growth stocks, Nahar explains why volatility isn't risk—and why India is uniquely positioned for long-term equity market gains as global macro headwinds continue to shift. Edited Excerpts – Q) Thanks for taking the time out. Qode's Tactical Fund and All Weather Fund outperformed the BSE 500 TRI in April — what were the key drivers of this strong performance? by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like An engineer reveals: 1 simple trick to get all TV channels Techno Mag Learn More Undo A) We specialise in risk management, and that played out well for us. We protect the portfolios with an element of gold as well as protection using puts. We were rewarded because of having these positions and exposure. The Qode All weather and Tactical portfolios are pure quant portfolios designed to outperform during bear markets. We have a strong risk management framework in place. Since last year, markets (especially mid- and small-caps) have been elevated, and we were in a risk-off mode. Only in the last few months have we taken some risk on these portfolios. All these decisions are not made subjectively. We have a pure data-driven approach and have done extensive testing with a deep understanding of markets. Live Events Q) What changes or tactical adjustments were made during April that contributed to portfolio resilience? A) Our portfolios are designed to weather bad months or large amounts of volatility. The Qode All Weather, as the name suggests, is designed to see lower drawdowns and outperform during bad times. We did not make any tactical changes, since we are a quant fund our models are designed taking years of data that have seen situations like this in the past. Q) With relatively low beta across the board, how does Qode manage downside risk while still seeking meaningful returns? A) With all weather and tactical, we try to maintain a low beta, but when markets are beaten down and businesses are available at attractive valuations, we are willing to take on risk. We are not afraid to take risk- when the situation is favourable. Our outperformance will come by protecting downside in bad years. To explain this, here is a simple example: Agencies The above table easily shows how drawdowns could affect your returns. Q) Qode Growth and Future Horizons have slightly higher standard deviations — is this due to increased sectoral concentration or style tilt? A) With Qode Growth Fund and Qode Future Horizons, we are looking at buying businesses that are showing strong earnings momentum. In the Growth Fund, we hold a 30-stock portfolio with an average market cap of 8000 crores. These are fairly strong businesses that have shown great execution capabilities in the past. But due to the size of the businesses being smaller, the stock price sees more volatility. With Future Horizon, we are looking to hold 10-12 fundamentally strong businesses with immense growth potential. This is a more concentrated portfolio because we have a lot of conviction in our picks. We understand the business in depth and take a large position in each of them. Because of the larger position sizes, the volatility is higher, but we do not consider volatility as risk. Q) How do you pick stocks? A) Qode Growth Fund, Qode All Weather and Qode Tactical are pure quant funds. Businesses and ETFs are picked based on factors that we think lead to EPS growth. There are three pillars we work around: 1. What to buy (fundamentally strong businesses) 2. When to buy (Valuations) and 3. How much to buy (position sizing) All our quant models are built around this framework. All three strategies are built with a data-driven approach. Our fourth strategy, Qode Future Horizon – we are looking at a quantamental framework because there are lots of great businesses with scattered data or data that's not structured. We look to meet the management and understand the business by taking a deep dive individually in each business. Q) The April edition highlights 'Steady in the storm, stronger in the sunrise' — how does this reflect your macro view heading into FY26? A) Our macro view remains fixed at the growth story for India and Equity markets. With the US debt crisis coming closer, a large amount of US debt is maturing in the next four years. Money printing and devaluation will be a large factor for equities to do well. So, money printing/devaluation plus a strong position for India will fuel the next bull market . Having exposure to assets like equities/gold and real estate (mostly land) will be a key component for individuals to maintain/grow their wealth. Q) What is your outlook for equity markets in Q1 FY26, and how are you positioning your portfolios in response? A) We refrain from having such a short-term outlook because markets are a complex place, and in the short run, factors like demand/supply, war, and trade policies will have a larger impact on their movement. Even if we could model all these factors there is no significant upside for anyone to have a view on the markets for a quarter or two. Q) Are there any sectors or themes you are overweight or underweight in currently, and why? A) We are sector/ theme agnostic. We look for fundamentally strong businesses that have a long runway for earnings growth and promoters that have excellent execution capabilities. We like to own owner-operated businesses with strong brand names and high ROCE's. Most of the businesses we own are completely debt-free and have had a strong earnings momentum.
Economic Times
30-04-2025
- Business
- Economic Times
'Equities are no longer optional': Qode's Rishabh Nahar on navigating market uncertainty with quant strategy
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel In a world of macroeconomic uncertainty, rising interest rates, and shifting liquidity dynamics, fund managers are under pressure to rethink strategy. According to Rishabh Nahar, Partner and Fund Manager at Qode Advisors, the current global environment—especially with the US facing a massive debt refinancing challenge—could reshape financial markets for years.'$28 trillion of US debt needs refinancing in the next four years. If foreign buyers step back, the US may print $10–15 trillion more. That kind of liquidity infusion could dramatically inflate asset prices across the board,' says believes the key to navigating such volatility lies in quantitative investing, but with a first-principles approach. He says, "Quant investing isn't about secret algorithms. People often think of quant investing as a black box spitting out multibagger stocks. But at its core, it's about first principles — owning businesses with strong earnings growth. We translate fundamental ideas like ROE, ROC, and promoter holding into structured, testable rules and see how they perform over time. That's what makes it quant."Now, unlike passive investing, which sticks to static rules, or active investing, which is subjective and based on human judgment, quant is dynamic and data-driven. It adapts to changing market conditions — whether it's growth, value, or gold-driven phases. In essence, it's the discipline of passive with the adaptability of active — but powered by logic and code."Distinguishing between, Nahar says:- Active investing involves deep fundamental analysis and subjective judgment.- Passive strategies follow static rules, like buying Nifty 50 via ETFs.- Quant investing, however, dynamically adapts to market conditions while staying data-driven and alpha decay—a common concern in the quant world—Nahar says it's only an issue if you're chasing patterns without logic. 'As long as your models are based on real business fundamentals and earnings potential, not just price patterns, alpha decay isn't a major threat.'Many people treat investing seriously but only as a side activity, spending maybe 20–30 minutes a day picking stocks. If you're not able to devote time consistently, it's better to invest via mutual funds or professional managers. However, if you're serious about wealth creation, there are many ways to generate alpha — one of the most effective being a multi-asset the last six months, while Indian markets struggled, US equities performed well. This highlights the importance of holding uncorrelated asset classes — large caps, mid caps, gold, and even global equities — to smooth out portfolio is a long-term journey. If your horizon is 5–10 years, what matters is the compounded outcome at the end. You want to own growth-driven businesses and build a peaceful, sustainable investment experience. A multi-asset portfolio helps reduce drawdowns and emotional stress, especially during market where the US economy stands today, and the likelihood of printing $10–15 trillion over the next four years, equity exposure is no longer optional — it's a necessity. Back in 2020, $5 trillion led to 9% inflation. If more liquidity floods the system, all asset prices could inflate. Without exposure to equities or real assets, you risk silently losing wealth. Despite current valuations, Indian markets offer strong earnings visibility and meaningful upside over a 4–5 year horizon. Now more than ever, owning equities is essential.
Time of India
30-04-2025
- Business
- Time of India
'Equities are no longer optional': Qode's Rishabh Nahar on navigating market uncertainty with quant strategy
In a world of macroeconomic uncertainty, rising interest rates, and shifting liquidity dynamics, fund managers are under pressure to rethink strategy. According to Rishabh Nahar, Partner and Fund Manager at Qode Advisors, the current global environment—especially with the US facing a massive debt refinancing challenge—could reshape financial markets for years. '$28 trillion of US debt needs refinancing in the next four years. If foreign buyers step back, the US may print $10–15 trillion more. That kind of liquidity infusion could dramatically inflate asset prices across the board,' says Nahar. Quant Investing: Not a Black Box Nahar believes the key to navigating such volatility lies in quantitative investing, but with a first-principles approach. He says, "Quant investing isn't about secret algorithms. People often think of quant investing as a black box spitting out multibagger stocks. But at its core, it's about first principles — owning businesses with strong earnings growth. We translate fundamental ideas like ROE, ROC, and promoter holding into structured, testable rules and see how they perform over time. That's what makes it quant."Now, unlike passive investing, which sticks to static rules, or active investing, which is subjective and based on human judgment, quant is dynamic and data-driven. It adapts to changing market conditions — whether it's growth, value, or gold-driven phases. In essence, it's the discipline of passive with the adaptability of active — but powered by logic and code." Distinguishing between active, passive, and quant investing , Nahar says: - Active investing involves deep fundamental analysis and subjective judgment. Live Events - Passive strategies follow static rules, like buying Nifty 50 via ETFs. - Quant investing, however, dynamically adapts to market conditions while staying data-driven and rules-based. How to Avoid Alpha Decay? On alpha decay—a common concern in the quant world—Nahar says it's only an issue if you're chasing patterns without logic. 'As long as your models are based on real business fundamentals and earnings potential, not just price patterns, alpha decay isn't a major threat.' How to Build an Evergreen Portfolio? Many people treat investing seriously but only as a side activity, spending maybe 20–30 minutes a day picking stocks. If you're not able to devote time consistently, it's better to invest via mutual funds or professional managers. However, if you're serious about wealth creation, there are many ways to generate alpha — one of the most effective being a multi-asset approach. In the last six months, while Indian markets struggled, US equities performed well. This highlights the importance of holding uncorrelated asset classes — large caps, mid caps, gold, and even global equities — to smooth out portfolio volatility. Investing is a long-term journey. If your horizon is 5–10 years, what matters is the compounded outcome at the end. You want to own growth-driven businesses and build a peaceful, sustainable investment experience. A multi-asset portfolio helps reduce drawdowns and emotional stress, especially during market corrections. What About Indian Market Valuations & Necessity of Equity Exposure? Given where the US economy stands today, and the likelihood of printing $10–15 trillion over the next four years, equity exposure is no longer optional — it's a necessity. Back in 2020, $5 trillion led to 9% inflation. If more liquidity floods the system, all asset prices could inflate. Without exposure to equities or real assets, you risk silently losing wealth. Despite current valuations, Indian markets offer strong earnings visibility and meaningful upside over a 4–5 year horizon. Now more than ever, owning equities is essential.
