Fund Philosophy
Fund Philosophy
Company Level
Volatility is here to stay
Volatility has become deeply ingrained in the financial landscape. This volatility primarily stems from the shift from traditional businesses to IoT and new-age tech companies. Although these firms fuel global economic growth and achieve high market valuations, they also face significant risks of failure. This situation is further complicated by the ongoing impacts of COVID-19, widespread monetary expansion, rising global debt-to-GDP ratios, and increasing geopolitical tensions.
As such, we must prepare for a future where volatility is not just a temporary challenge but a permanent aspect of our financial landscape. With this in mind, our fund’s active management strategy based on our investment philosophy and strategy
is meticulously designed to monitor the volatility of thoroughly researched companies, ensuring strategic, responsive investment decisions.
Our approach leverages Derivatives Trading in India, utilizing Trading Derivatives and exchange-traded derivatives to mitigate risks and enhance potential returns, making it one of the Best AIF Funds in India. Through Alpha Investments and the Alpha Generator, we aim to deliver consistent performance despite the market’s ups and downs.
At Volvin, we recognize the significant impact of human emotions, particularly greed and fear, on financial and capital market behaviors. These emotions not only influence market dynamics but also open up unique investment opportunities.
Thrill-seekers—ranging from roller coaster enthusiasts to casino gamblers and stock market speculators—demonstrate a willingness to pay for risk, driving profitability in industries such as amusement parks, casinos, and financial markets. This behavior validates the saying, “The House Always Wins,” and is integral to our strategy.
We leverage this by strategically selling options to these speculators, turning market volatility into consistent profits through collected premiums. Our investment approach is rigorous and selective, focusing on stock valuation, growth potential, and dividend yield. We remain wary of high PE ratios in sectors like FMCG, e-commerce, and fintech, where valuations often outpace realistic growth projections. For instance, many FMCG stocks priced at 60-80 PE presume assured growth years ahead, while the IoT sector downplays failure risks. Our strategy is committed to sustainable investments that balance rewards with calculated risks.
Product & Fund Level Philosophy
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Active Rabbit
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Consistent Tortoise
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Momemtum Leopard
Active Rabbit
Winning through Monthly Returns Generation: This investment philosophy and strategy capitalizes on aggressive call options writing. By strategically selling call options, the fund captures premiums as a reliable source of income. This method effectively leverages stock market volatility to generate consistent monthly returns, independent of broader market movements.
Step 1: In the Equity segment, the fund operates like a diversified mutual fund, investing in stocks of 40-60 companies listed in the NSE Futures & Options Segment from a pool of over 190 stocks.
Step 2: The fund employs covered call options to produce monthly income. It systematically sells monthly options on stocks within its equity portfolio, generating returns in the derivatives segment.
Active Management: Achieving an annualized return of 12-15% from the equity markets is considered robust over the long term from an Indian perspective. Among approximately 5000 stocks listed on the NSE-BSE, about 190+ are also traded in the NSE Futures & Options Segment. From July 2021 to June 2022, these 195 stocks displayed an average 52% price variation between their highs and lows, with the highest variation at 189% and the lowest at 21%. This rate of fluctuation significantly surpasses the 12-15% annualized returns typically expected from passive investments in Indian markets.
Technical Analysis: Volvin harnesses the high volatility of these stocks through precise technical analysis, aiming to buy near the lows and sell near the highs of a stock’s price movement. The inherent volatility also justifies the integration of derivatives in our investment philosophy, which are employed for hedging, profit booking, and writing call options on the underlying equity portfolio.
Monthly Market Scenarios:
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Fund Performance (Indicative):
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This refined approach showcases Volvin’s strategic methods in navigating market dynamics, emphasizing our robust active management and technical analysis capabilities to optimize returns through various market scenarios.