MUTUAL FUND- ONE INVESTMENT FOR ALL YOUR GOALS

At Investza Capital, our investment philosophy revolves around simplicity and tailoring strategies to align with your unique financial objectives. Leading our approach is Abhishek Mehta, our Chief Mentor, who emphasizes our steadfast commitment to recommending mutual funds exclusively for long-term positions, steering clear of direct equity investments and portfolio management services (PMS).

Now, you might be curious about what sets Investza Capital apart. Our Unique Selling Proposition (USP) is rooted in our ability to craft straightforward and uncomplicated investment portfolios. We may not cover every financial product available in the market, but we firmly believe that in the realm of investing, knowing what not to do can potentially boost your returns by a significant 2-3 percentage points. Our primary objective is to target annual returns falling within the range of 11-14% (CAGR) at the portfolio level while keeping standard deviations comfortably below 8%. Unlike many in the wealth management industry, we place a strong emphasis on rigorous numerical risk assessment, a practice that sets us apart and benefits our clients tremendously.

Our typical client comprises individuals with a balance sheet ranging from Rs. 1 to 5 crore. By ‘balance sheet,’ we refer to assets specifically earmarked for capital growth, excluding assets in regular use such as your primary residence. It’s worth noting that ‘assets under management’ in this industry can sometimes be a nebulous term, but rest assured, we currently have more than 500 satisfied clients under our care.

Now, let’s delve into our equity recommendations. At Investza Capital, we advocate the use of mutual funds for long-term equity positions due to their inherently lower standard deviations compared to direct equity investments, where standard deviations can reach as high as 30-35%. Portfolio management services (PMS) are not a part of our strategy for various reasons, including unfavorable profit-sharing structures, tax inefficiencies, and the potential for higher standard deviations. Our unique strength lies in our ability to select mutual funds with the potential to outperform the Nifty index in the future.

In our investment approach, index funds do not find favor. Pursuing a ‘zero alpha’ strategy, which is essentially a cost-cutting approach, is analogous to disarming oneself in a war. At Investza Capital, we prioritize value generation over cost reduction. If you possess the capability to utilize statistical tools to identify future performance trends and generate an alpha of 2-3% annually on the Nifty, it begs the question: Why opt for an index fund? Our consistent track record attests to our ability to outperform the Nifty, with an impressive 42% of large-cap funds achieving this feat year after year with a margin of 2.28%.

When considering international equity exposure, it’s vital to ask yourself why you seek it. Often, investors are drawn to international funds due to their past impressive performance. However, at Investza Capital, we make it our mission to educate our clients about the potential downsides and risks associated with such investments. If international exposure is your goal, we recommend exploring equity funds within conventional categories that offer global exposure. This approach allows fund managers to make strategic decisions, such as selling assets like Netflix, without being bound by the constraints of an index fund.

Turning our attention to debt products, we prioritize stability and prudently avoid undue credit risk. Our preferred instrument in the debt market is debt funds, even if they offer a more modest return in the range of 5-6% (post-tax with indexation). Should you desire higher returns, our strategy involves slightly increasing allocations to equity rather than taking undue risks in the debt market. While we did dabble in credit risk funds in the past, we had the foresight to exit before the market was hit by the debt crisis during the pandemic. At present, we have not reintroduced such funds for the sake of an additional 1.5-2% return. Additionally, we steer clear of direct bonds due to their tax inefficiencies, particularly for high-net-worth individuals (HNIs).”