Abakkus Diversified Alpha Approach

What Is Abakkus Diversified Alpha Approach PMS?

The Abakkus Diversified Alpha Approach PMS is a benchmark-agnostic, multi-cap equity strategy built around a simple idea: invest across market capitalisations without being tied to a particular index or market trend. The strategy uses a 40:30:20:10 portfolio construction model, combining large, mid, small and micro-cap exposure.

The approach focuses on bottom-up stock selection, value-conscious investing and a disciplined risk-reward framework. Rather than chasing whatever is moving in the market, the investment process looks for businesses where fundamentals, valuation and future growth potential justify taking a position.

The portfolio typically holds around 30–40 stocks, with position sizes designed to balance conviction, diversification and liquidity. Investors comparing different Portfolio Management Services can evaluate this strategy based on its market-cap allocation, investment philosophy, fee structure and risk profile.

Source: Abakkus latest factsheet.

Abakkus Diversified Alpha Approach PMS: 40:30:20:10 Asset Allocation Model

The Abakkus 40:30:20:10 approach divides the portfolio across four market-cap segments:

The allocation is indicative rather than a rigid promise. Actual exposure can change depending on investment opportunities, liquidity and the portfolio manager's assessment.

Large and Mid-Cap Allocation: The Portfolio's Stability Core

Around 70% of the model is allocated to large and mid-cap companies. This provides the portfolio with exposure to relatively established businesses while still leaving room for companies with stronger growth potential.

The idea is not simply to make the portfolio "safe". Equity investments remain exposed to market risk. Instead, the larger-cap allocation is intended to provide a stronger base while smaller companies contribute additional alpha opportunities.

Small and Micro-Cap Allocation: Where the Alpha Comes From

The remaining 30% is directed towards small and micro-cap opportunities.

This is where the strategy can look beyond well-known market leaders and identify businesses that may still be under-researched or under-valued. At the same time, smaller companies can carry higher liquidity and business risks.

The strategy addresses this by keeping individual positions smaller as market capitalisation decreases. That is why the allocation moves from approximately 4% per large-cap stock to around 1% per micro-cap stock.

Source: Abakkus latest factsheet.

Abakkus Diversified Alpha PMS Investment Philosophy: MEETS Framework Explained

The investment philosophy behind the Abakkus Diversified Alpha PMS is fundamentally driven. The team evaluates businesses from the bottom up rather than simply following market narratives or popular themes.

The proprietary MEETS framework examines five areas:

A company can look excellent on paper and still be a poor investment if the price leaves little room for future returns. That distinction between a good company and a good stock is central to the strategy.

The framework also looks for businesses capable of meaningfully growing profits over time, while paying close attention to the quality of that growth.

Source: Abakkus latest factsheet.

Abakkus 5D Investment Process

The 5D investment process takes an idea from a broad universe to a focused portfolio.

The process is designed to reduce the distance between an interesting stock and an investable stock. A company may look attractive at the screening stage but still fail later because of valuation, management concerns, earnings quality or portfolio-level risk.

This structured approach also helps investors understand how portfolio construction works inside a professionally managed PMS strategy.

Source: Abakkus latest factsheet.

The Four Cs Abakkus Avoids in Stock Selection

Abakkus also identifies four behaviours and risks it prefers to avoid:

• Chase Momentum: Investment decisions are driven by business fundamentals rather than simply following rising prices.
• Churn Unnecessarily: The approach avoids needless buying and selling and favours a lower-churn, long-term investment style.
• Copy & Mimic: Investment ideas are expected to come from internal research rather than herd behaviour or popular market consensus.
• Credit Risk: Businesses with fractured or stressed balance sheets can become value traps, making balance-sheet quality an important consideration.

This approach supports a more patient, research-led portfolio rather than one built around frequent trading.

Source: Abakkus latest factsheet.

Abakkus Valuation Entry and Exit Framework

Valuation is not treated as an afterthought. The framework asks a straightforward question: what is already priced into the stock?

Abakkus's broader valuation discipline looks for opportunities where valuation, earnings growth and return ratios create a favourable risk-reward equation. The commonly referenced 15:15:15 framework considers three parameters:

• Valuation below 15x earnings
• ROE above 15%
• Earnings growth above 15%

The framework is not intended to act as a mechanical screen for every stock. Instead, it provides a useful discipline for assessing whether the expected return justifies the price being paid.

Source: Abakkus latest factsheet and Abakkus investment framework materials.

Abakkus Diversified Alpha Approach PMS Fees, Exit Load and Minimum Investment

The Abakkus PMS minimum investment is ₹50 lakh.

Investors can choose between two fee structures:

The strategy also has an exit load:

Investors should evaluate the complete PMS fee structure, including applicable taxes and other charges, before investing. The performance-linked option can align the manager's compensation with returns above the stated hurdle, while the fixed option offers a simpler fee structure.

When comparing PMS strategies, investors should review the hurdle rate, high watermark, exit load, brokerage, custody charges and taxes before committing capital.

Source: Abakkus latest factsheet.

Abakkus Diversified Alpha Approach PMS Risks and Investor Suitability

The Abakkus Diversified Alpha Approach PMS may suit investors looking for professionally managed equity exposure across large, mid, small and micro-cap companies, with a long-term investment perspective.

The potential advantages include:

• Diversification across market capitalisations
• A defined 40:30:20:10 portfolio framework
• Bottom-up fundamental research
• A structured MEETS evaluation process
• Focus on valuation and risk-reward
• Lower portfolio churn
• Exposure to smaller companies that may offer higher growth potential

But there are trade-offs.

The portfolio remains exposed to equity-market volatility. Small and micro-cap investments can experience sharper price movements and lower liquidity. Concentrated stock positions can also affect portfolio performance when individual holdings move significantly.

The strategy therefore makes more sense for investors who can tolerate equity volatility and remain invested over a longer horizon rather than investors looking for short-term or predictable returns.

There is also no guarantee that the strategy will generate alpha or outperform its benchmark. Investors should assess their risk appetite before investing in a multi-cap PMS with small and micro-cap exposure.

How to Invest in Abakkus Diversified Alpha Approach PMS via ALTPORT

Investors looking to access the Abakkus Diversified Alpha Approach PMS through ALTPORT can begin by discussing their investment objective, risk appetite, investment horizon and eligibility.

The key investment details to review include:

1. Minimum investment: ₹50 lakh
2. Strategy: Multi-cap, benchmark-agnostic equity approach
3. Portfolio construction: 40:30:20:10 across large, mid, small and micro caps
4. Benchmark: S&P BSE 500 TRI
5. Fee choice: Fixed or fixed-plus-performance structure
6. Exit load: 1.5% within 12 months; nil thereafter

ALTPORT can help investors understand the strategy, compare relevant PMS and alternative investment options, and navigate the onboarding process.

Explore the PMS and investments sections on ALTPORT to evaluate the strategy alongside other professionally managed investment options.