Investment Analysis and Portfolio Management - B

Investment Analysis and Portfolio Management – B
Division: B Group: 9
Niketshyam Agrawal C005
Rahul Yaduvanshi F063
Deepti Mhatre I034
Jay Mehta J034
Shivam Mishra J036
Swapnil Tasgaonkar J060

Name of the fund: Black Pearl Capital Fund
Investment Objective:
The objective aims to create long-term capital appreciation via a diversified portfolio that invests in
multi-cap stocks of companies across varying market capitalization. This multi-cap, the multi-sector
fund would be best suited for risk-averse investors seeking high to moderate returns.
Investment Philosophy:
“The stock market is a device for transferring money from the impatient to the patient.”
At Black Pearl, we focus not on timing the market, but on making the right security selection. After
a thorough top-down analysis, we arrive at industry and asset classes to invest in. We then select only
the securities that we believe are the absolute best. We save your capital from erosion by staying
invested. Passively managed funds provide better returns at lower fees to the investors, and it is with
the value we provide for you in mind, we choose to manage our funds passively.
Our fund is a balance of growth and value, ensuring safety of your principal while generating
attractive returns from growth investing. Our portfolio is majorly based on selecting quality securities
available at good values, a practice that preserves the capital, while giving out attractive returns as
we specialize in stock-picking. A relatively smaller portion of the fund is invested in alpha-generating
growth assets that have higher future earnings prospects, harnessing the huge potential the market
has. With Black Pearl Capital Fund, risk-return scales are tipped in your favor.
Investment Process:
Stage 1 screening will involve a subset of stocks of well-managed companies from the available
investment universe based on some return ratios such as ROE, ROCE, Profit margin growth, etc.
Stage 2 will involve research on the stocks included in the subset from various sources like conference
calls & annual reports, online sources, and other links.
Stage 3 will involve deciding on the weight allocations for the different stocks according to their
performance over the last 5-10 years’ time frame and other basic fundamentals.
Stage 4 will entail monitoring the portfolio for rebalancing to gain superior risk-adjusted returns.
Our portfolio shall be split as follows: 60 % large-cap equity, 25 % in mid-cap equity, and 15% in
small-cap. The scheme would be benchmarked against the NIFTY 500.
Security Screening Process:
We aim to maintain a “buy and hold” strategy and follow a ‘Top-Down Approach’ by identifying
sectors and further equities positioned to grow alongside the given economic conditions. Further, we
will identify value stocks using a thorough quantitative and qualitative analysis for the stocks.
Quantitative parameters Qualitative parameters
1) Revenue and Net Income growth 1) Quality of Management
2) Operating and net profit ratios 2) Competitive moat
3) Credit ratings 3) ESG compliant
4) Valuation & leverage ratios
Rebalancing & Benchmarking:
Portfolio rebalancing is done every fortnight to maintain the ratio of the mix. The scheme would be
benchmarked against the NIFTY 500, which is most suited for comparing the performance of the
scheme. The fund managers reserve the right to change the benchmark if due to a change in market
conditions, an index appears to provide a more appropriate basis for comparison of performance.
Alpha Generation Technique:
Compared to the benchmarked index, the excess return earned on the portfolio is the Alpha of that
portfolio. It is one of the performance parameters used to assess the invested stock or portfolio. Other
such values include beta, standard deviation, R-squared, and the Sharpe ratio. We will not time the
market but focus on finding good instruments through a top-down approach and financial analysis
for the alpha generation. We will try to generate Alpha of 8-10%.
Fee Structure:
Management Fee @1.5% of AUM + 10% of returns in excess of the Benchmark (Nifty 100)
Expense ratio: 1.85%
The Black Pearl Capital Fund is a passive fund. Its net expense ratio is 1.85%. For every increase
of 5,000 crore in AUM, the Total Expense Ratio will reduce by 0.05%.
The components of the Expense ratio are as following:
1. Management Fee
2. Maintenance Fee
3. Brokerage
4. 12B-1 Fee (Newly launched fund)
Exit load: 0%
The Black Pearl Capital Fund charges 1.0% of sell value; if the fund sold before 365 days. There
are no other charges.

Investment Analysis and Portfolio Management - B

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Investment Analysis and Portfolio Management - B

Uploaded by

Investment Analysis and Portfolio Management – B

Niketshyam Agrawal C005

Rahul Yaduvanshi F063

Deepti Mhatre I034

Jay Mehta J034

Shivam Mishra J036

Swapnil Tasgaonkar J060

Security Screening Process:

1) Revenue and Net Income growth 1) Quality of Management

2) Operating and net profit ratios 2) Competitive moat

3) Credit ratings 3) ESG compliant

4) Valuation & leverage ratios

Rebalancing & Benchmarking:

Alpha Generation Technique:

Expense ratio: 1.85%

The components of the Expense ratio are as following:

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