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Abakkus Emerging Opportunities Fund Portfolio

About Company

Abakkus Asset Manager LLP is an alpha-focused asset manager based in India. Mr. Sunil Singhania founded it in 2018 and called it after the simplest ancient computing device, the abacus. The goal and aim of Abakkus is to become one of India’s most reputable and successful asset managers. This ideology has shaped the Abakkus portfolio’s beliefs: Keep things as straightforward as possible. Be a firm believer in the basics. Focus on the fundamentals and numbers.

Fand Snapshot

Year of Inception 2020
Number of Stocks Around 25
Investment Horizon 3-5 yrs
Fund Managers Sunil Singhania and Aman Chowhan
 

Abakkus Emerging Opportunities Fund Performance

The portfolio had another great month, logging in a good ~11% returns for the month. The benchmark returned ~7% and hence there was a good ~4% alpha by the fund for the month. Portfolio companies continued to report strong earnings growth and that in a major way, contributed to these returns. Abakkus Fund continues to be optimistic about its portfolio holdings and have not materially changed the portfolio construct.

Abakkus Asset Management alternative investment funds (AIFs) provided investors with a positive return in 2020. The Abakkus Emerging Opportunities Fund 1, popularly known as AEOF, returned 51 percent in CY20. On the other side, Abakkus Growth Fund – 1 (AGF) saw a year-over year increase of 28 percent. Regardless, both closed-ended category III AIFs outperformed their respective benchmarks and markets.

Unique Feature

Using Abakkus Emerging Opportunities With a bias toward mid-and small-cap stocks, PMS is a diversified portfolio independent of benchmarks. The fund has the self-discipline to only invest in businesses that meet at least two of the three requirements. The portfolio invests in fundamentally sound concepts chosen using a bottom-up methodology. We frequently go for the second or third player in the industry, but at a big discount to the leader. By following our “MEETS” Framework and buying with a normal holding time of 3-5 years, the portfolio aims to create alpha and wealth. 

Buy & Hold is practised by Abakkus Asset Manager. This indicates that the Abakkus investment team invests in the firm’s stock or share as though doing so as a partner in the company rather than a share trader.

Investments are made in small and midsize businesses with scalable business strategies by Abakkus Emerging PMS / AIF. This describes firms with a high potential for growth, whereby small-cap companies eventually become mid-cap companies, and mid-cap companies eventually become large-cap companies.

 

Investment Philosophy

Abakkus as an asset manager has its key focus on alpha. The main focus of Abakkus Emerging Opportunities Portfolio is to invest in benchmark agnostic portfolios across different market capitalisations. 

The investment managers at Abakkus Emerging Opportunities Portfolio follow the 15:15:15 approach. Here, they aim to invest in businesses having at least two out of three criterias. 

  1. ROE >15%
  2. Earnings Growth >15%
  3. P/E Ratio < 15

The investment managers at Abakkus  believe in the ‘boEmerging Opportunities Portfolio follows the ‘bottom-up’ approach to picking stocks. The large-cap allocation is focussed on stability with a ‘top-down’ sectoral view. They invest in three kinds of companies viz,. Growth companies, value companies and buy-and-hold companies. They prefer to be contrarian and invest with focus beyond chasing momentum, but chasing earnings.

Capital Allocation

Allocated Category Allocation Percentage
Large Cap 8.3%
Mid Cap 49.8%
Small Cap 37.2%
Cash / Equivalent 4.7%

Top 5 Stock Holdings

Name of The Stock Allocation Percentage
Federal Bank Ltd. 6.7%
ION Exchange India Ltd. 6.5%
Allcargo Logistics Ltd. 6.4%
IIFL Finance Ltd. 5.4%
UPL Ltd. 4.9%

Top 5 Allocated Sectors

Sector Name Allocation Percentage
Industrials 26%
NBFC 15%
Materials 15%
Banks 10%
Consumer Discretionary 8%