Alchemy Smart Alpha 250
Our view on the fund, the AMC, the strategy, the performance & the investment team.
IME's Review of Alchemy Smart Alpha 250
| Fund Rating | Strategy Rating | Performance Rating |
|---|---|---|
Upgrade | Upgrade | Upgrade |
View on the Fund
This newly launched fund by Alchemy is yet to establish its own track record. Given the AMC's recent underperformance, we remain cautious about its potential. However, we appreciate the fund's algorithm-driven framework and its focus on large and mid-cap investments. It's worth noting that Alchemy is traditionally known for its flexible investment philosophy, not algorithm-based strategies, making this a relatively new direction for the AMC.
Strategy
Quant eQGP (Environment, Quality, Growth, Price) framework
Fund's Strategy View
The strategy focuses on large and mid-cap investments, building a concentrated portfolio of 25 high-conviction stocks across sectors like consumer discretionary, financials, and industrials, guided by the AMC’s proprietary eQGP (Environment, Quality, Growth, Price) framework. A quant methodology is applied with scores given on each of the eQGP factors, in order to arrive at a final score - which forms the basis of final portfolio construction. While there is a quant-framework, the underlying scoring of the eQGP factors is still qualitative judgements of the core investment team (so this accordingly cannot be considered a quant fund).
Fund Performance
We refrain from evaluating the fund since it is yet to mature (less than 5 years).
Trailing Performance
| 1yr | 3yr | 5yr | Since Inception | |
|---|---|---|---|---|
| Alchemy Smart Alpha 250 | 14.3 | 20.5 | ||
| S&P BSE 500 | 6.5 | 13.8 | ||
| Alpha over Broad Mkt BM | 7.8 | 6.7 |
Performance as of: 31-Jan-26 | Inception Date: 10-Aug-23 | Performance are post-fees, pre-taxes. Global funds denominated in USD or fund currency.
Investment team
Hiren Ved | 5-star rated FM
CIO | 35 yrs Experience | 27 yrs at current firm
Past Experience: Prime Securities (Head - Equities), KR Choksey (Head of Research)
Hiren is a very seasoned investment professional, with close to 3 decades of investment experience. He co-founded Alchemy Capital Mgmt in 1999, helping build it into one of the leading PMS's in the country, on the back of long-term stability in the investment management team and strong alpha generation over time.
IME's Review of Alchemy PMS
| AMC Rating | Pedigree Rating | Team Rating | Philosophy Rating |
|---|---|---|---|
Upgrade | Upgrade | Upgrade | Upgrade |
View on AMC
Alchemy, backed by strong founders and a seasoned CIO, has shown meaningful performance recovery across strategies. The firm’s consistent investment approach and ability to identify quality businesses are translating again into improved outcomes. With performance momentum returning and its core philosophy intact, Alchemy now merits a higher conviction and a 4-star rating
AMC's Pedigree
Alchemy is a leading broking and PMS provider in India with a highly experienced founding team. However, a SEBI verdict (in Mar-23) against one of their founders in an insider trading case is a cause for concern, although he is not directly involved in the PMS operations.
AMC Team
Alchemy has a strong investment team led by co-founder and CIO Hiren Ved, who brings stability, experience, and respect to the firm.
Investment Philosophy
Alchemy excels in bottom-up stock picking but lacks a clearly defined investment philosophy, allowing flexibility in shifting between investment themes but making it challenging to understand the investment strategy.
Investment Strategy
Alchemy Smart Alpha 250 PMS follows a quantitative, rules-based investment approach focused on large- and mid-cap equities. The strategy aims to generate alpha with lower volatility by combining the stability of large-cap stocks with growth opportunities in mid-caps. Portfolio construction is driven by a systematic process using the proprietary eQGP framework (Environment, Quality, Growth, Price), resulting in a concentrated portfolio of approximately 25 high-conviction stocks.
Core Investment Approach
eQGP Framework for Stock Selection
- Environment: Adjusts exposure based on liquidity conditions, interest rate trends, corporate profit cycles, and broader macroeconomic factors.
- Quality: Evaluates businesses on capital efficiency, leverage levels, consistency of cash flows, and management strength.
- Growth: Focuses on earnings growth, market share expansion, and improvements in operational efficiency.
- Price: Incorporates ownership trends, liquidity considerations, and risk–reward dynamics to optimise entry points.
Portfolio Construction Process
- Investment universe restricted to the top 250 companies by market capitalisation.
- Companies are scored and ranked based on Quality, Growth, and Price factors.
- Portfolio weights are assigned based on relative scores, with higher-ranked companies receiving larger allocations.
- Final portfolio consists of the top 25 companies with the highest composite scores.
- Ongoing rebalancing ensures continuous optimisation based on market and stock-specific developments.
AMC Background
Alchemy was founded in 1999 by Lashit Sanghvi, Hiren Ved, Rakesh Jhunjhunwala, and Ashwin Kedia, a group with over 100 years of collective experience in Indian equities. The investment strategies are actively managed by Hiren Ved, who continues to serve as CIO and primary fund manager, while Rakesh Jhunjhunwala and Ashwin Kedia are not involved in day-to-day operations. Alchemy is regarded as one of the strongest bottom-up stock-picking PMS houses in India and has scaled to become one of the largest PMS platforms in the country (ranked among the top four). The continued leadership of Hiren Ved provides long-term stability to the investment team, a critical factor in sustaining performance and organisational growth.
Investment Philosophy
Alchemy relies more on a disciplined and repeatable investment process to identify attractive bottom-up opportunities than on a narrowly defined investment philosophy. The flexibility of this approach allows the fund manager to adapt positioning across market conditions, while remaining anchored to fundamental research and valuation discipline.
Alchemy’s Investment Process – 3I Matrix
- Idea Generation: Tracks a broad universe of ~500 companies, with deep coverage of 100–150 names. Ideas are generated through internal research as well as external inputs such as industry interactions, peer discussions, and sector conferences.
- Investment Process: Managed by the CIO, who retains veto power at multiple stages of research and portfolio construction. Positions are continuously monitored and formally reviewed on a quarterly basis.
- Intervention: Active intervention by the CIO in portfolio sizing, risk management, and exits, based on evolving risk–reward dynamics.
Exits are driven by deterioration in the original investment thesis, adverse risk–reward shifts, or the emergence of superior opportunities elsewhere in the portfolio.
Suitable For
Investors seeking flexible, actively managed equity portfolios with the ability to adapt across market cycles, led by a stable and experienced fund management team.
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