Emerging Giants: G&C Small Cap

    Investment Objective

    The investment objective of the Emerging Giants: G&C Small Cap PMS is to invest in firms which are small caps today and have the potential to grow into larger firms of tomorrow. Our framework driven approach supplemented with bottom-up fundamental research will help create a concentrated portfolio of promising small caps- companies which are clean on governance and accounting and good on capital allocation while also holding promise of continued longer term growth.

    Market cap universe will typically be small caps with companies lower than 2500 cr market cap as the primary focus.

    Description of Securities and Basis of Selection

    Investments will typically be made in cash equities with the option of parking surplus liquidity in money market instruments, liquid funds, debt mutual funds etc.

    Investments in the Emerging Giants portfolio are made only in cash equity markets and mutual funds (liquid or overnight). The fund philosophy is against investment in Futures & options, debt or commodity instruments. The investment in equity stocks is based on the proprietary framework adapted by the AMC.

    Allocation of portfolio across types of securities

    As mentioned above, the portfolio is comprised of long only equities from cash markets only.

    Appropriate benchmark to compare performance and basis for choice of benchmark

    Nifty Small Cap Index. This benchmark index has been selected as it is the closest resemblance to the underlying portfolio composition

    Investment Approach and Strategy

    • To create a portfolio with an objective to generate capital appreciation over the long term in promising small cap companies. The Portfolio Manager shall follow a research based approach for selecting stocks in the portfolio with a combination of framework and bottom up research driven process.
    • The firms should, in addition to the potential of continued growth, have a track record of clean accounting and governance and efficient capital allocation.
    • After screening stocks through our selection frameworks initially, subjective assessments will be made to narrow down to the final portfolio of stocks

    Indicative tenure / Investment Horizon: 3-5 years

    Derivative Investment Strategy

    No use of derivatives is envisaged in this strategy

    Investment Structure and Reporting

    The Emerging Giants: G&C Small Cap Portfolio shall be operated on “Client Level” basis. All investors’ Assets will be in client wise individual separate Bank and Depository Account as the case may be. The Portfolio Manager may at its discretion ordinarily purchase or sell Securities in aggregate for economy of scale and thereafter inter se allocate the same amongst its client on pro-rata basis as per applicable regulations. The portfolio manager shall not hold any securities, belonging to the portfolio account, in its own name on behalf of the clients.

    Additionally, through the Agreement the investor shall provide a Power of Attorney authorizing the Portfolio Manager to perform all his investment decisions and all other obligations. All investors shall receive monthly transaction and performance Report. Further, at the year-end an audited performance Report specifying the long term, short term and dividend received during the year shall be sent to the investor for assisting him/it to file the returns.

    Eligibility for Investment in the Ambit Good & Clean Mid Cap & Small Cap Fund

    • Resident Individuals, Proprietorship Firms, HUFs, Partnership Firms, Registered Trusts, Corporate, FII and any other eligible investors.
    • Non Residents Indians (NRIs) are eligible to invest in this portfolio. The portfolios for NRIs shall be managed keeping in view the list of stocks where Reserve Bank of India has barred investments by NRIs. Accordingly the NRIs portfolio may differ to that extent with the other persons in this Product.
    • Furthermore, the individual portfolio of each person may differ based on the various criteria like the corpus amount, residential status or such other criteria, as may be required by the regulations.
    • The portfolio of each client may differ from that of the other client in the same portfolio strategy, as per the discretion of the Portfolio Manager.

    Minimum Investment Amount

    To participate in the Emerging Giants: G&C Small Cap Portfolio the minimum investment by the investor shall be Rs.50 lakhs or as may be provided in the applicable regulations. In the event the Client is interested in investing in the Minimum Investment amount in the form of traded shares or Mutual Fund units, the Client will have to liquidate and make payments to the Portfolio Manager.

    Risks associated with the product

    Two risks exist for the portfolio – a) a Marco driven even can drag the overall markets down thus impacting the performance of the portfolio, and b) individual companies may report earnings below expectations, acquire a business, take on debt and such company specific events which are considered normal and they can also impact the portfolio return.

    Risk factor (General)

    All investments under the portfolio are subject to market and other related risks and there is no assurance or guarantee that the value of or return on investments will always be accretive, it could depreciate to an unpredictable extent.

    Withdrawals or Redemption

    Withdrawals from the Emerging Giants: G&C Small Cap can be requested on any working day and the liquidation for the same may take up to 7 working days to execute depending on the liquidity of the portfolio constituents.

    Additionally for investors whose Portfolio value goes below the minimum threshold as provided in the regulations due to withdrawals as per the aforementioned terms and conditions then the Portfolio Manager will have the discretion to close the investors account by liquidation of his position and / or give the shares of the companied invested in to the client and /or refund the balance.


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