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Fund Investment Philosophy
The investment philosophy of Capitalmind Select India One is rooted in Evidence-Based Quantitative Investing, moving away from “bold short-term predictions” in favour of repeatable, systematic processes.
- Systematic Factor Harvesting: The fund is a long-bias multi-factor fund that focuses on “harvesting” reliable drivers of equity returns. It specifically targets three proven factors that have historically outperformed in the Indian market: Momentum (investing in winners), Quality (companies with strong balance sheets and profitability), and Low Volatility (stocks that provide smoother returns).
- The “Sleeving” Approach: To remain adaptable, the fund uses a “Sleeving/Mixing” approach. This allows the manager to adjust exposure to different factors as market regimes shift, acknowledging that different strategies flourish at different times.
- Rules-Based Discipline: Every decision is dictated by objective, pre-defined rules to eliminate emotional bias. The strategy is agnostic to market cap, sector, and style, typically holding a concentrated portfolio of 20 to 40 stocks identified by proprietary algorithms rather than human intuition.
- Active Risk Management: The philosophy emphasizes downside protection alongside growth. The fund utilizes systematic hedging techniques and tactical “cash-calls” to mitigate risk during significant market drawdowns, aiming to deliver consistent risk-adjusted returns.
- Focus on Probabilities: Capitalmind views investing through the lens of ranges and probabilities. By relying on decades of historical data and rigorous statistical analysis, the fund seeks to “make money while the investor sleeps” by remaining alert to evolving market realities.
