Nippon High Conviction Equity Systematic Rebalancing Option
Nippon India PMS | Equity | | PMSIME's View on Nippon High Conviction Equity Systematic Rebalancing Option
Strategy
Investment Fund
This scheme is currently not under our coverage universe.
Fund's Strategy View
The Strategy aim to invest in concentrated portfolio (20-25 stocks) accross market cap in high growth businesses that are existing leaders in their field of operations. The strategy prioritizes high-quality businesses that are corporate leaders (in their respective industry), leveraging their competitive advantages for a robust capital preservation stance and the potential for capital appreciation.
Fund Performance
The fund has underperformed peers & is amongst the worst performing schemes in this category in the last 5 year trailing returns. In terms of longer-term annual performance, performance has been consistent, with the fund having outperformed it's benchmark in over 60% of annual calendar years.
IME's View on Nippon India PMS
View on AMC
Nippon India AMC PMS faces challenges common to large MF-driven PMS houses, such as PMS being an add-on instead of a distinct business unit, turnover in the investment team, lack of commitment from the CIO, and vague investment philosophies. Despite potential advantages like distribution support and research access, MF-driven PMS's generally do not match the performance of founder-driven PMS houses with strong CIO leadership. In addition, with Nippon PMS having recently experienced senior team churn, we would wait for the new team to stabalise prior to recommending Nippon PMS funds.
AMC's Pedigree
Nippon India AMC is a top-5 asset manager in India, known for managing mutual fund assets. While being part of a larger asset management house has its benefits, their pedigree in PMS cannot compare to investor-driven PMS companies with stable investment teams and defined processes.
AMC Team
High FM/team churn risk for AMC-driven PMS firms due to lack of stake in the firm. Varun Goel, with Nippon PMS since 2017, left in Mar-24 to join Mirae MF.
Investment Philosophy
The investment philosophy focuses on being benchmark agnostic, concentration, and following the Must 5 framework, providing flexibility for interpretation by the fund manager.
Nippon India High Conviction-Investment Strategy
Focus on top investment ideas by building a concentrated portfolio
Nippon India’s High Conviction Portfolio is a market-cap agnostic (or multi-cap) strategy that aims to build a concentrated portfolio (20-25 stocks) of their top investment ideas.Investment Philosophy
The portfolio follows the Nippon India PMS investment philosophy of a benchmark agnostic concentrated portfolio of high-quality stocks that meet their Must 5 framework.- Business Potential: Looking for businesses with growth opportunity & sustainable competitive advantage.
- Corporate Governance: Businesses having a fair treatment for minority shareholder, promoter track record, accounting red flags.
- Earnings track record: consistent performance across business cycles on revenue, EBITDA, PAT growth and profitability ratios.
- Promoter ownership: having equity dilution, share pledge
- Capital allocation: unrelated diversification, leverage
Investment Process
High conviction Portfolio is chosen by going through a Qualitative and Quantitative screening. The Qualitative screening is based on Indian Corporate Leaders which is identified by-- Brand
- Innovation
- Technology
- Size
- Niche
- Cost
- Earnings Growth> 15%
- ROE>15%
Trailing Performance
| 1yr | 3yr | 5yr | Since Inception | |
|---|---|---|---|---|
| Nippon High Conviction Equity Systematic Rebalancing Option | -4.8 | 17.6 | 17.4 | 15.6 |
| S&P BSE 500 | -6.6 | 14.7 | 19.2 | 16.5 |
| Alpha over Broad Mkt BM | 1.8 | 2.9 | -1.8 | -0.9 |
Performance as of: 30-Sep-25 | Inception Date: 08-Jul-19 | Performance are post-fees, pre-taxes. Global funds denominated in USD or fund currency.
Investment team
Rahul Veera | 3-star rated FM
FM | 15 yrs Experience | 2 yrs at current firm
Past Experience: Abakkus (FM), Elara Capital (AVP), Edelweiss (Sr Research Associate)
Rahul Veera currently serves as the Fund Manager (Equity) at Nippon India AIF, boasting over 14 years of extensive experience encompassing Equity Research and Fund Management. He has previously worked with renowned organizations including Abakkus Asset Managers, Morgan Stanley, Edelweiss, and Elara Capital. He holds a Bachelor of Commerce degree from H.R College (Mumbai University), an MBA from Swansea University (UK), and an Executive Finance certification from the Indian Institute of Management (Calcutta).
