[Name to be decided]     Capital Advisors
QUOTE    “ Not yet have I found any better method to prosper during the future    financial chaos, which is likely to last...
[Name to be decided] Investment Advisory division specializes in quantitativetrading and investment strategies. We offer t...
AWARENESS    MISSION    To lead the industry in the delivery of investment solutions that add value for our    clients, br...
Philosophy & Approach    Our Philosophy is preservation of capital and risk    minimization first, then delivering consist...
Investment StrategiesProbability based trading A combination of technical and fundamental strategies involvingvaried holdi...
Strategy Development Cycle        Market                              Trading Strategy       Research                     ...
Fund ManagementSystematic Trading Strategy After a thorough research and techno-fundamental mix of statistical tools and ...
Salient Features… Our trading strategies identify the most correlated stocks from the universe of all the stocks listed o...
Trading Strategy - Explained               Stock A                                          Stock B        We have 2 stock...
Snapshot of a few other trading strategies..UNIFIED MANAGED ACCOUNT                 ASSET ALLOCATION   TAX EFFICIENCY   MA...
Historical Back-Tested Results on the Multi-Strategy Model                                          [Apr 2005 to Sep 2010]...
Risk StatisticsAnnual Standard Deviation       31%Monthly Standard Deviation      5%                                  Risk...
Contact Us     Mumbai     Ahmedabad14
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Investment Capital Advisors

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Investment Capital Advisors

  1. 1. [Name to be decided] Capital Advisors
  2. 2. QUOTE “ Not yet have I found any better method to prosper during the future financial chaos, which is likely to last many years, than to keep your net worth in shares of those corporations that have proven to have the widest profit margins and the most rapidly increasing profits. Earning power is likely to continue to be valuable, especially if diversified among many nations… ” - John Templeton2
  3. 3. [Name to be decided] Investment Advisory division specializes in quantitativetrading and investment strategies. We offer tailor-made innovative products andsolutions to suit the need of our clients.Our prime goal is to generate absolute positive returns each month, using riskminimized market neutral strategies. Our proprietary investment process utilizesproprietary in-house non-traditional investment strategies to achieve our absolutereturn objectives.3
  4. 4. AWARENESS MISSION To lead the industry in the delivery of investment solutions that add value for our clients, bringing innovation and discipline to strongly held investment convictions. VISION Our vision is to be the worlds leading Investment Advisory firm helping clients secure their future and increase personal net worth. We apply the highest standards to all aspects of our business, from the sophistication of our investment process to the ambitions of our ongoing research to the quality of our client service. OBJECTIVE To manage equity portfolios on National Stock Exchange of India and Global Markets, using non-directional, market neutral and hedged strategies.4
  5. 5. Philosophy & Approach Our Philosophy is preservation of capital and risk minimization first, then delivering consistent, absolute positive returns regardless of the market conditions. We conduct our own research for the exclusive benefit of our clients. Because we are not engaged in investment banking activities and have no in-house products to push into portfolios, we have no conflicts of interest to cloud our judgment. Ours is truly an independent investment management firm.5
  6. 6. Investment StrategiesProbability based trading A combination of technical and fundamental strategies involvingvaried holding periods. The trading strategies are tailored to eliminate general market risk.Hedged Portfolio Trading Maintaining a market neutral portfolio is one of the fundamentalprinciples of asset management we follow, exploiting relative mispricing and inefficienciespresent in the market. Covertly known as Statistical Arbitrage, these are concepts focusingupon absolute returns irrespective of market direction.High Frequency Trading Over the years the time tested proficiency we have achieved instriking a balance between the risk quotient of the products we trade, our exposurecoupled with our market timing skills, gives us that extra edge over the other players in themarket. UNIFIED MANAGED ACCOUNTRelative Value / Spread Trading We go long an instrument while shorting another in sucha way that the ASSET ALLOCATION no net exposure EFFICIENCY market moves. The ACCOUNTS to profit portfolio has TAX to broad MANAGED goal isfrom relative mispricing between related instruments.6
  7. 7. Strategy Development Cycle Market Trading Strategy Research Development Trading Strategy Development Cycle Trading Strategy Strategy Execution Back-Testing7
  8. 8. Fund ManagementSystematic Trading Strategy After a thorough research and techno-fundamental mix of statistical tools and technical indicators, we have devised a systematic trading strategy which has generated above average returns in any market conditions. The trading strategy that derives its returns from the relationship between the performance of its long position relative to the performance of the short positions. The execution of multi-strategies involves a holding period until the difference between the underlying reverts back to its mean. And until the difference converges to its mean the strategy captures consistent profits using statistical arbitrage and hedging the risk. In our trading strategies, we focus on dollar neutrality and try to offset beta neutrality to ASSET ALLOCATION TAX EFFICIENCY MANAGED ACCOUNTS the maximum possible extent. The profit/loss on the trades is the difference between the dollar values of the underlying long and short positions. 8
  9. 9. Salient Features… Our trading strategies identify the most correlated stocks from the universe of all the stocks listed on NSE F&O. All the strategies, and positions are always in a combination of a LONG positions & SHORT positions i.e. HEDGED from the directional movement of the markets and hence the positions will experience very minimal or no loss even if the market get directional. One of the main reasons we got interested in spread trading is the fact that we are not taking a directional bet in the market, instead, we are taking a bet on the relative performance of two instruments - so basically, we are saying, from where we are now, instrument A will outperform instrument B, since historically they have behaved in aUNIFIED MANAGED ACCOUNT particular way relative to one another. On next slide, the performance of a few trading strategies on NSE will show that despite of the market behaving random and directional in the last 5 years, our trading strategies have been very much in range, and hence has given us trading opportunities in all the market conditions. ASSET ALLOCATION TAX EFFICIENCY MANAGED ACCOUNTS 9
  10. 10. Trading Strategy - Explained Stock A Stock B We have 2 stocks here, Stock A and Stock B. The chart represents their respective prices from Apr- 2005 to Sep-2010. As we understand the pattern of each stock individually, it becomes very difficult to determine the direction of the stock during any given point of time and hence becomes difficult Stock A - Stock B to trade on individual basis. The chart below “Stock A – Stock B” shows that the difference between the 2 stocks has veryUNIFIED MANAGED ACCOUNT much been within the range for the last 5 years and generates a very systematic Tops and Bottoms. These tops and bottoms can be traded while keeping the ASSET ALLOCATION TAX EFFICIENCY MANAGED ACCOUNTS the underlying direction and hedged hence having a minimal dollar exposure to the market.10
  11. 11. Snapshot of a few other trading strategies..UNIFIED MANAGED ACCOUNT ASSET ALLOCATION TAX EFFICIENCY MANAGED ACCOUNTS11
  12. 12. Historical Back-Tested Results on the Multi-Strategy Model [Apr 2005 to Sep 2010] Capital Profit/ Returns p.a. Cumulative Profit/Loss from 2005 to 2010 [In Rs. 100,000] Year Utilization Loss (In %) 252.12 Mar’ 06 51,86,000 13,54,000 26.11% 232.64 Mar’07 91,67,000 49,70,000 54.22% 166.83 Mar’08 89,31,000 64,13,000 71.81% 127.37 Mar’09 67,06,000 39,46,000 58.85% 63.24 Mar’10 55,02,000 65,81,000 119.61% 13.54 Sep’10 72,17,000 19.48 26.99%(6 months) 12
  13. 13. Risk StatisticsAnnual Standard Deviation 31%Monthly Standard Deviation 5% Risk-Return StatisticsMaximum Monthly drawdown -4.30%Percentage of Positive Months 81.81%Risk StatisticsAnnual Standard Deviation 31%Risk StatisticsRisk StatisticsAnnual Standard Deviation 31%Monthly Standard Deviation 5%Maximum Monthly drawdown -4.30%Percentage of Positive Months 81.81%Return StatisticsLowest Monthly Returns -4.30%Highest Monthly Returns 17.79%Average Monthly Returns 4.25% 13
  14. 14. Contact Us Mumbai Ahmedabad14

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