Novice investors like you and me are under the bounden duty to keep an eye on the performance of illustrious investors. This exercise keeps us inspired and ensures that we stay on the right path.
A few days ago, we saw the returns delivered by Manish Bhandari’s Vallum Capital PMS, AlphaInvesco (a reputed stock advisory firm), and Porinju Veliyath’s Equity Intelligence PMS in the fiscal year 2015-16.
Prof Sanjay Bakshi’s PMS is called ValueQuest India Moat Fund. It is run by a company called ValueQuest India Moat Fund Limited, which is based in Mauritius.
The objective of the ValueQuest India Moat Fund is stated to be “to deliver high risk-adjusted returns”. It is also stated that “The Fund invests in Moats, i.e. companies with businesses possessing what the Manager believes are sustainable competitive advantages”.
In a post at the microcap club, Prof Sanjay Bakshi revealed that the ValueQuest Fund has a “concentrated portfolio” and that it has invested in stocks which have “very high quality of earnings”, “exceptionally strong balance sheet quality” and “highly scalable businesses”.
The holdings of the ValueQuest India Moat Fund are not known in their entirety. Some stocks which are known to be in the portfolio include Ambika Cotton, Poddar Developers, Wim Plast, Ashiana Housing, Accelya Kale Solutions and Kitex Garments.
In an earlier piece, I lamented that the performance of the Prof’s favourite stocks (some of which are in the portfolio of the ValueQuest India Moat Fund) is quite disappointing. Some worthies like Vaibhav Global and Kitex Garments have been beaten out of shape in the wake of poor operating performance. Of course, some stocks like Wim Plast and Relaxo have put in a spirited performance and notched up hefty gains.
|Stock||Nos of shares held by Moat Fund as of 31st March 2016||YoY Return (%)|
|Accelya Kale Solutions||115,928@||15|
*As of 31.12.2015
#As of 31.03.2015
@As of 30.06.2015
The difference between the two schemes is not known. My uneducated guess is that the distinguishing alphabets ‘A’ and ‘B’ in the symbols may stand for ‘Alpha’ and ‘Beta’ respectively.
“VQINMTA:MP” has, as of 29th April 2016, lost 15.05% on a YoY basis and 7.64% on a YTD basis. “VQINMTB:MP” has, as of the same date, lost 13.29% on a YoY basis and 5.89% on a YTD basis.
This performance is quite disappointing when we bear in mind that Manish Bhandari’s Vallum Capital PMS was able to clock in an impressive 26.7% return in the fiscal year 2015-16.
What may have also taken a toll on the performance of the ValueQuest India Moat Fund in dollar terms is the adverse movement of currency. In the period from 1st April 2015 to 31st March 2016, the rupee has depreciated by about 6.74% from Rs. 62.09 to Rs. 66.28 in relation to the USD. This means that an investment of $1,000 made in Indian equities as of 1st April 2015 is worth $936 as of 31st March 2016, all other things remaining unchanged.
In fact, the situation has worsened because the rupee has depreciated further to Rs. 67.18 per USD as of date in the wake of the Brexit crises.
Bloomberg also stated that the total assets of the ValueQuest India Moat Fund Ltd stands at $23.963 Million which works out to Rs. 161 crore.
Prime facie, the AUM of Rs. 161 crore is not a very high figure considering the stature that Prof Sanjay Bakshi enjoys amongst cognoscenti investors with deep pockets.
In fact, in the same period, the AUM of Porinju Veliyath’s Equity Intelligence soared 78% to Rs. 392 crore coupled with a steep increase in the number of clients.
My guess is that these are early days for the ValueQuest India Moat Fund and that in the foreseeable future it can be expected to grow in AUM and to post stellar returns under the able guidance of Prof Sanjay Bakshi!