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Alchemy Alpha Small Cap
Fund Snapshot
| Objective | To generate long-term risk-adjusted returns |
| Type of securities | Equity |
| Investment Approach | Company Fundamentals & Risk & Reward Ratios |
| Portfolio Allocation | Up to 100% in equity |
| Portfolio Construct | Max of 50 stocks |
| Benchmark | BSE 500 Tri |
| Investment Horizon | 3 to 5 years |
Fund Overview
Alchemy Alpha Small Cap is one of the Portfolio Management Services products managed by M/s Alchemy Capital Management Pvt. Ltd., a SEBI-registered Portfolio Manager.
Alchemy Alpha Small Cap is a rule-based algorithm driven strategy that is sector agnostic, based on data and researched processes. A High-Risk High Return oriented strategy which aims at generating long term alpha consistently by investing in small cap companies.
The fund is diversified across various sectors, with top holdings including Blue Star Ltd (6.4%), Nippon Life India Asset Management Ltd (5.8%), and Firstsource Solutions Ltd (5.7%). Other notable stocks include Aegis Logistics Ltd, Cholamandalam Financial Holdings Ltd, and Kfin Technologies Ltd. Sector & Market Cap Allocation Industrials (33.0%) and Financials (21.4%) form the largest sector allocations, followed by Consumer Discretionary (10.4%) and Consumer Staples (9.1%). The fund is heavily invested in small-cap stocks (66%), with mid-cap exposure at 32% and cash allocation at 2%.
Investment Style
At Alchemy Capital Management, the investment philosophy is driven by a quantitative approach to ensure a disciplined and unbiased strategy for generating consistent alpha.
Key Principles:
Right Stock + Right Theme + Right Sector + Right Market Cycle = The formula for a successful investment strategy.
Why Quantitative Investment?
- Traditional active investing relies on subjective decision-making and forecasting based on individual perspectives, leading to inconsistencies.
- The Alchemy Capital quantitative investment model is data-driven, model-based, and rigorously back-tested to eliminate human biases.
- Portfolio construction focuses on optimal timing and risk-reward metrics to achieve sustainable returns.
Investment Criteria
Alchemy Capital investment approach is structured around three core pillars:
1. Growth
- Revenue Growth
- Income Expansion
- Free Cash Flow Generation
- Capital Expenditure (CAPEX)
2. Market Cycle
- Performance vs. Market Index
- Relative Drawdown Management
- Price Performance Analysis
- Volatility Assessment
- Shareholding Trends
3. Fundamental Metrics
- Cash Conversion Cycle
- Working Capital Efficiency
- Return on Capital
- Debt Levels
These factors are an integral part of the Alchemy Quant Proprietary Model, ensuring an objective and structured approach to investment decision-making.
