Prabhudas Lilladher Asset Management’s flagship AQUA PMS has achieved an impressive return of 54.37% since its June 2023 launch, against BSE 500’s 27.11%, representing a 2x multiplier. This translates into an alpha i.e. outperformance of 27.26%, a report from PL showed.
Despite the turbulence in broader markets in February, the flexicap quantamental strategy navigated market conditions with agility and successfully limited the drawdown.
AQUA is India’s pioneering style adaptive and style agnostic strategy, designed for alpha generation across market cycles. Within just 8 months of its launch, AQUA has surpassed the INR 200 crore AUM (Assets Under Management) milestone and has consistently ranked among India’s top performing flexicap PMS and mutual funds.
Over the past 5 years, PL has focused on building a state-of-the-art quant infrastructure and multidisciplinary team comprising CAs, CFAs, statisticians, economists, CMTs, risk analysts, and python programmers. This team blends the diverse sciences into one, using a quantitative approach, and has developed highly differentiated PMS strategies like AQUA, which stands for Adaptive Quantitative Unbiased Alpha-Focused.
Decoding the strategy’s ability to outperform, Mr. Siddharth Vora, Head of investment strategy and Fund Manager said, “AQUA’s success lies in its ability to dynamically adapt to changing market conditions. This flexible, unbiased, and quantamental approach to portfolio construction results in superior risk-adjusted performance backed by systematic processes. For example, at the start of the month, AQUA’s portfolio was predominantly invested in mid and small caps. However, guided by its quantitative model, the strategy detected overvaluation in mid and small caps and identified relatively undervalued large caps.
Accordingly, AQUA rebalanced its asset allocation to prioritise large caps, which now represent 50% of the portfolio compared to less than 25% previously. Meanwhile, the allocation to mid and small caps was reduced to 27% and 23%, respectively, aiming to lower portfolio beta and take advantage of the comparatively more attractive valuations and greater margin of safety offered by large caps.” The PMS Strategy Updates and Insights report offers comprehensive insights into AQUA’s sectoral allocation strategy, investing style, and the rationale behind its investment decisions.
