11
About Prodigy Investment Management (Prodigy) Niche and unorthodox player in the investment
management vertical whose approach is unconventional &
unique.
Prodigy‟s flagship product, Prodigy Growth Strategy, has
an excellent track record, and Prodigy BlueChip Strategy
was launched in April, 2011.
Prodigy Investment Management is the operational brand
of MIV Investment Services Pvt. Ltd. – SEBI licensed
portfolio managers.
Prodigy now also offers a debt PMS and a multi-asset
class Mutual Fund PMS. Thus Prodigy is now a single
window provider of holistic investment solutions.
22
About Prodigy (continued)
Founded in June 2004 with the vision of providing a
growth-oriented and a process-driven approach to
investment management.
• Over 100 families, with Assets Under Management of over
Rs. 100 crs (internally generated profits to date are
Rs. 150+ crs.).
• Returns since inception amongst the top decile of all
domestic investment managers.
Principals are Mr. Ravi Chadha (MD & CIO) and Mr. Sharad
Nayak (Director-Research), extremely experienced with
combined knowledge of 35 years in the stock market.
33
Equity Products
Growth Strategy
Focus on identifying emerging blue chips that are
undervalued and likely to grow earnings in excess of 20%
p.a. for the next years with high ROI/ROE.
Upto 15-20% may be allocated to small cap/mid
cap/emerging sectors, if environment is conducive, to
achieve higher returns, but with controlled risks.
BlueChip Strategy
Focus on investing in established blue chips that are in an
uptrend and, have room for re-rating. Minimum market cap
of company should be around USD 1 billion (Rs. 5000 crs).
Upto one third may be invested in emerging blue chips to
provide an impetus to returns, if opportunity exists.
44
Strategy
Thus “Momentum In Value”
MOMENTUM VALUE
OUR FOCUS AREA
M
I
V
55
See slide 10
See slide 6
See slide 7
See slide 8
See slide 8
See slide 11
See slide 9
The Investment Process
66
Momentum Strategy-Reverse Research (RR) Unconventional approach to technical analysis.
RR uses proprietary indicators to signal formation of long
term trends in scrips and/or sectors.
The proprietary indicator extracts the intrinsic strength (or
weakness) of an individual scrip & suppresses the market
noise.
• RR works on the principle that it is necessary to
accommodate what stock prices are telling us every point in
time and be aligned to long term trends.
• Understanding key support and resistance levels important.
• „Reversion to Mean‟ risk parameters established to capture
profits and prevent investment in overheated situations.
Back to Investment Process
77
Fundamental Strategy
Do fundamental research and analysis on identified scrips to
determine reason for intrinsic strength.
Filter out well managed businesses that:
Are likely to display maximum growth and where valuations
are cheap relative to growth (under owned relative to
growth potential).
That create or take advantage of structural change (as
opposed to cyclical change).
Are in a phase of accelerated growth/inflection point in their
life cycle and where growth is sustainable.
Have strong re-rating triggers (P/E expansion headroom).
Exit on companies that fail to deliver as per expectation.
Management quality & Balance Sheet quality key factors.
Capital productivity focus and (high ROI /ROE).Back to Investment Process
88
Portfolio Construction
Make an initial allocation between 1.5%-2.5% of corpus if
valuation parameters are satisfied. Allocation also dependant
on business size, opportunity and market condition/situation.
Increase allocation if business and price performance is
favourable or confidence in growth increases.
Reduce/Exit/Stop-loss if scrip/financial performance
unsatisfactory.
Ride gainers as long as possible, and cut losers as soon as
possible.
Adequate portfolio diversification ensured through minimum
allocation to 15 scrips. 80% of allocation in maximum 20
scrips, prevents over diversification.
Back to Investment Process
99
Risk Management Strategy
Risk management responsibility/function are separated from
that of Chief Investment Officer.
Parameters set in place to activate buy, stop buying & sell
triggers.
Position sizing based on overall market health, valuation
changes & scrip performance. Scrip liquidity is a key
determinant of allocation.
Rigorous monitoring of „Equity Curve‟ for deterioration.
Stop losses – both price wise and time wise.
Limit on quantum of loss on a single investment (loss trigger
at 1/2% - 3/4% of corpus).
Keep „small caps‟ at less than 15%-20% of portfolio.
Keep sectoral allocation to maximum 20%-25% of portfolio. Back to Investment Process
1010
Exit Strategy/Booking Profits
Deterioration in earnings growth.
Sharp upward movement in share price in a short span
far ahead of fundamentals. Reversion to mean risk
heightened.
Loss of secular relative strength of a stock.
Reaching of exit points based on technicals viz previous
life highs upper end of channel etc.
Achievement of price targets and full valuation.
Trailing take profits.
Need to raise portfolio cash levels due to emerging poor
„macro‟ conditions.
Back to Investment Process
1111
Payout Policy
Policy to pay out a minimum of 50% of realised profits
every quarter.
• Distribution of profits is in the spirit of “Invest Well.
Celebrate Life.”
Will introduce discipline in us to realise gains at an
appropriate time.
Help meet clients tax commitments in a timely manner.
Back to Investment Process
1212
Right Human Attribute
Discipline to stick to a defined strategy and process even
during times when the going may not be good.
Humility to exit when wrong.
Attitude to analyse performance, identify mistakes and
incorporate the learnings to improve our processes.
Client Testimonials
• “Prodigy‟s investment style over the previous two years has beenan absolute revelation. The team combines an uncanny ability tospot big winners amongst mid-cap, small-cap space with extremehard work to track and research stocks covered by them. I feel thatthey occupy a niche amongst the investment world, which hithertowas in a vacuum.”
Faisal Hawa (Partner), H. G. Hawa & Co.
• “I have moved from all my other portfolio managers to you as Ihave found your team to be totally professional in its approach andmore than willing to adapt to the customers needs. Returns havebeen exceptionally good and have exceeded the best of my otherfamous-named portfolio managers.”
Rakesh Khanna, Founding Partner, Ambit RSM
• “My congratulations on your brilliant performance. In this highlycompetitive market you have been able to find outright winnerstime and again.”
Purrshottam Bhaggeria, Nouvelle Securities Pvt. Ltd.13
1414
Prodigy Chameleon Fund (Fund of Funds) The objective of this strategy is to ensure that your mutual
fund holdings are always aligned to the performing asset
classes and sub asset classes in the investment world, thus
ensuring that the portfolio grows steadily and helps
preserve capital by exiting out of asset classes that are
beginning to underperform.
• Prodigy has researched all mutual funds and created a pool
of approximately 175 funds and ETFs that are investment
worthy across asset classes, considering all parameters
including size, pedigree and track record. This pool is a
dynamic pool and its constituents may change periodically
based on continuous research.
1515
Prodigy Chameleon Fund (cont.)
Your portfolio will be in equity mutual funds when they are
beginning to and continuing to perform, and will get shifted
to debt funds when either equity funds begin to
underperform or reach levels where the valuations could be
considered to be in „bubble‟ territory.
Prodigy will also monitor if any sub asset classes like mid
caps in equity funds or gilt funds in debt funds are
outperforming and make an allocation to the same so that
the overall portfolio does not miss out on the possible
accelerated returns there from. The maximum exposure to
any sub asset class will be 20 percent of the portfolio.
1616
Prodigy Chameleon Fund (cont.)
• Also, the equity funds will be taxed as per equity funds, at
concessional levels, and the debt funds will be taxed at debt
levels, unlike other hybrid funds that get taxed at higher
levels as debt funds irrespective of the level of equity
holdings.
• Thus the endeavor is for Prodigy to assume all the
headaches you may face in running your mutual fund
portfolio and provide you with a single window solution, as a
portfolio management service at a nominal fee.
17
Prodigy Debt Strategy
The objective of this strategy is to develop comprehensive
debt portfolio that integrates the clients‟ investment
objectives and his risk profile.
The aim will be to strike a balance between maximizing
investment returns and mitigating risks, while
maintaining appropriate liquidity levels.
This is followed up by regular monitoring and adjusting
based on environment changes and anticipated changes
in the yield curve.
The strategy is being managed as a discretionary portfolio
management product and is managed by Mr. Ashish
Nigam, who has over 14 years of experience in Indian
Fixed Income markets, Foreign Exchange and Interest
Rate Derivatives market.
18
Prodigy Debt Strategy (cont.)
Online access is available to your portfolio. Audited
statements are provided at the end of the financial year.
This service is being provided at a very nominal fee of
0.25% p.a.
Contact Details
For further information please contact
Mita Sheth - Head Customer Care & Brand Management
Tel: +91-22-22875801 Fax: +91-22-22875802
Email: [email protected] www.prodigyinvest.com
Prodigy Investment Management
A Division of MIV Investment Services Pvt. Ltd.
4th Floor, Oricon House, K. Dubash Road, Fort,
Mumbai 400001. India.
SEBI Registered Portfolio Managers.
Registration number: INP 000001413
19
Disclaimer
• This document is not for public distribution and has been furnishedto you solely for your information and any review, retransmission,circulation and any other use is strictly prohibited. Persons intowhose possession this document may come are required to observethese restrictions. This document is subject to changes withoutprior notice and is intended only for the person or entity to which itis addressed to and may contain confidential information and/orprivileged material. We are not soliciting any action based uponthis material.
• Neither MIV Investment Services Pvt. Ltd., nor any personconnected with it, accepts any liability arising from the use of thisdocument. The user assumes the entire risk of any use made ofthis information. Past performance is not a guide for futureperformance.
• Investment in equities involves substantial risk includingpermanent loss of capital (in whole or in part) and hence may notbe suitable for all investors.
• The sub-limits as mentioned in Slide 3 are purely indicative. Thesemaybe revised upwards / downwards based on market conditions.
20
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