To generate capital appreciation across market cycles by investing in a concentrated set of high conviction stock.
1) Concentrated 15 Stocks portfolio of Long term compounding Stories
2) Companies that are maintaining 20% ROCE/ Self-Funded Models Lead by High visionary Leadership/ Across Sectors,
3) Motive is to generate decent returns with high quality companies and maintaining low beta stocks, which shows the low risk portfolio and less volatile as compare to the benchmark and betting on few sectors (Consumer Goods, Financial Services, Media Entertainment, Services and Auto Mobile) in which portfolio is overweight visa vis the benchmark “NIFTY 500”.
The term which best describes SISOP is “Consistency”. The underlying investment philosophy since the inception of the strategy is to invest in businesses which deliver consistent earnings growth above 20%, supported by good cash conversion and asset light business model. In addition to earnings growth, it emphasizes on the businesses being managed by highly competent and visionary management.
• 3Q Quality Approach To Stock Selection
• Quality of Business – Pricing Power, Profitability, Growth, Brand Strength, Capital Intensity, Complexity of Business
• Quality of Management – Past Track Record, Management Bandwidth, Corporate Governance
• Quality of Financials – Capital Allocation, Leverage, Cash Flow Generation, Return on Capital
• Concentrated portolio of upto 15 stocks
• Invests across market cap – “Multi Cap”
• Compounding Stories
• Grow more than 1.5x nominal GDP growth
• Potential to generate ~ 20% cash flow / earnings growth across market cycles
• ROE: > 20%
• Self-funded model – Growth through internal accruals.
• Companies should exhibit high Corporate Governance standards and have visionary leadership.
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