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Emkay Lead

Scheme Rating

IME Scheme Rating

The Scheme does not meet our selection criteria at this time

Can be considered for Investing: Suitable for investors looking for concentration but would need to wait to see the performance of the scheme.

IME Strategy Rating

Concentrated Large & Mid Cap Strategy: A pure bottom-up, buy & hold multi-cap strategy of around 15 high-quality companies. Investing in companies benefitting from value migration ahead of the curve along with structural growth plays driven by domestic consumption. Strong risk management strategy with a focus on Capital Preservation. Emkay’s Lead Performance is a concentrated multi-cap portfolio (not more than 15 companies), with a fairly well-defined investment strategy & philosophy.

PMS Scheme Ratings are driven by IME’s Proprietary Scheme Rating Methodology, which takes into account our ratings of the Scheme’s investment strategy, its maturity, the investment team, and our separate rating on the AMC that runs this particular scheme. Our views on each of these individual criteria are available via the IME RMS – which you can view by reaching out to one of our relationship managers (using either the live chat or book appointment feature on this site).

IME View on Emkay Lead

Type: Large & Midcap | GARP | AUM (8.3 cr) | Inc Date (01 Nov 2018)

Emkay Lead- Investment Strategy

Investing in high quality large and mid cap businesses having market leadership position, wide economic moats, quality management and reasonable valuations

Emkay PMS’s Lead Strategy (Leadership, Excellence, Ambition, Discipline) focuses on investing in high quality large and mid-cap businesses that have a market leadership position, wide economic moats, quality management, and reasonable valuations. The initial universe of the top 250 companies by market cap is run through earning growth, leadership, and valuation framework-based filters, to identify a selected list of 15 stocks to be included in the portfolio.

Investment Strategy

  • Leadership: Leaders in terms of market share, profit pool, cost effiecient, growth, product, moat/ niche in business 
  • Excellence: Strong Management credentials having a track record of past decisions.  Seek for management comments vs delivery, having future-vision. Avoiding business with aggressive accounting policies and a quality management background. 
  • Ambition: Seeking for businesses that have strong earnings visibility and quality. Also looking at how big the sector can be (3x, 4x..). Businesses having revenue.PAT, Cash flow growth. ROE, ROCE analysis. As well as high operating/ free cash-flow generation. 
  • Discipline: Identifying Price-Value gap with focus on margin of safety. Businesses with comparative valuations, looking at market-cap vs opportunity size. 

Risk Management Focus

  • Risk Management: building a portfolio having equal weightage by reviewing a stock when there is a price movement of >15% in a month. Also focusing on the liquidity risk with no use of leverage. There will be a monthly portfolio review. 
  • Diversification across industries and companies: Ensuring a single sector exposure of <30% and a single stock exposure of <10% also a turnaround or special situation stocks exposure of <20%. Having a maximum of 15 stocks.
  • Focus on large-cap companies: Having a >50% exposure in companies with Market Cap >$3bn. Investing in top 250 companies by market cap having a minimum turnover of INR 500 cr 
  • Earnings growth and quality filter: ensuring companies that are invested into have ROCE>COE and their earnings growth> GDP growth. 

Investment Process

To mitigate a selection bias, they follow a rigorous framework from a universe of more than 500 listed companies. Out of these 500 250 companies are filtered. In order to filter these companies the framework followed is:

Defined Market Cap Filter: Filtering 180-190 companies as per market cap with focus on large and mid-cap having net sales more than Rs 500 cr. 

Earnings Growth Filter: Focusing on businesses that have a strong historic and future growth stocks defined by businesses having ROCE>COE and their earnings growth> GDP growth. Filtering 130-140 companies.

Strong Leadership Framework Filter: Filtering 80-90 companies that follow strong leadership in terms of market share, profit share, cost, growth, product. These businesses also having strong management credentials in terms of vision, track record, growth. 

Valuation: Focusing on 30-40 companies by looking at price-value gap through DCF with focus on marging of safety. Also having a comparative valuations, Mcap vs opportunity size, PEG ratio.

Selecting 15 stocks

Trailing Performance

1yr 3yr 5yr Since Inception
Emkay Lead 22.2 7.3 11.7 10.8
S&P BSE 500 TRI 41.1 18.9 22.9 17.8
Alpha over Broad Mkt BM -18.9 -11.6 -11.2 -7
Nifty 500 40.2 17.7 21.5
Alpha over Category BM -18 -10.4 -9.8

Performance as of: 31-Aug-24 | Inception Date: 01-Nov-18

Fund Managers

Fee Structure

Fee StructureFee
Fixed Fee Structure2.3
Variable Fee Structures1%+10% above 8% or 20% obove 10%
Exit Fees1yr (3%), 2yr (2%), 3yr (1%)

AMC

AMC: Emkay PMS (click link for detailed AMC review)

Can be considered for investment: With strong broking credentials, Emkay PMS follows a strong process-oriented approach to investment management. While we would have preferred to see a higher mid-cap focus (Emkay is known more for its mid-cap strengths as a brokerage), we do like the very clearly articulated and followed fundamental process frameworks that are used to build the portfolios.

AMC Rating

3 of 5 stars

AMC Pedigree

3 of 5 stars

AMC Size

2 of 5 stars

Team Pedigree

3 of 5 stars

Inv Philosophy

3 of 5 stars

Performance

2 of 5 stars

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