Investment Strategy
Alchemy Smart Alpha 250 Fund is a Category III AIF that utilizes a quantitative, rules-based approach to invest in large and mid-cap equities. The strategy aims to generate high alpha with lower volatility, balancing stability from large-cap stocks with high-growth opportunities in mid-caps. The fund follows a systematic investment process, leveraging its proprietary eQGP framework (Environment, Quality, Growth, Price) to construct a concentrated portfolio of 25 high-conviction stocks.
Core Investment Approach
eQGP Framework for Stock Selection:
- Environment: Adjusts exposure based on liquidity conditions, interest rates, corporate profit trends, and macroeconomic factors.
- Quality: Evaluates businesses on capital efficiency, leverage, cash flow consistency, and management strength.
- Growth: Focuses on profit growth, market share expansion, and operational efficiency.
- Price Action: Incorporates ownership trends, risk-reward dynamics, and liquidity factors to optimize entry points.
Dynamic Portfolio Construction & Rebalancing:
- Invests at least 65% in listed equities (large & mid-cap stocks).
- Can allocate up to 10% to IPO opportunities or other instruments.
- Portfolio is rebalanced regularly to adapt to changing market condition
Portfolio Construction Process
- Top 250 Companies by Market Cap – Investment universe limited to the largest 250 companies.
- Scores Based on QGP Framework – Companies are ranked based on their Quality, Growth, and Price factors.
- Weights Assigned Based on the Score – Higher-scoring companies receive larger allocations.
- Top 25 Companies Selected – The highest weighted average scores determine final portfolio inclusion.
- On-Going Rebalancing – The portfolio is continuously optimized based on market and stock-specific changes.