New Delhi, 13th Aug 2024 : Pace 360, a leading macro top-down focused asset management firm based in New Delhi, has announced the launch of its new PMS strategy—Tresor Smart Alpha. The fund is being launched against the backdrop of Indian markets at all-time highs, with exuberance visible in the PE ratios and valuations of select sectors and stocks. An innovative strategy is essential in these polarizing markets, characterized by extreme overvaluations on one side and undervalued pockets on the other. Tresor Smart Alpha aims to capitalize on India’s economic ascent by identifying a basket of opportunistic investments through a dynamic asset allocation approach leveraging Exchange Traded Funds (ETFs). A precisely allocated portfolio of quality centric ETFs can capture the outperformance of multiple sectors, themes, and diversified asset classes across geographies within a single PMS strategy.
Tresor Smart Alpha leverages Pace 360’s robust screening methodology, backed by its three decades of investment expertise, to identify overlooked growth opportunities in the Indian markets. As pioneers in the Macro Top-Down investment framework in India, Pace 360 has consistently generated significant risk-adjusted alpha and uncorrelated returns in sideways and volatile markets, as well as positive returns during both bull and bear markets. Their models identify undervalued sectors that are often missed by incorporating macro technicals, cross-asset correlations, geopolitical factors, and behavioral finance. The strategy aims to generate smart alpha through a selective basket of Sector and Thematic Equity ETFs, providing investors with exposure to long-term, mega-transformative themes in the Indian economy.
The fund rotates between opportunities based on macro economic indicators, market cycles and analysis of both the fundamentals and technicals of a theme or sector aiming for a beta below one when markets are overvalued and higher than one when they are undervalued. This strategy seeks to offer an enhanced risk-adjusted alpha by controlling the beta at levels appropriate to different phases of the equity markets. By investing in a diverse range of ETFs across geographies and sectors like Auto, FMCG, Pharma, IT, financial services and themes such as Electric Vehicles, Defence and Infrastructure, Tresor Smart Alpha provides a well-diversified portfolio for long-term growth.
Amit Goel, Co-founder & Chief Global Strategist at Pace 360, emphasized the value of investing in ETFs, “With Tresor Smart Alpha, we’re offering investors a unique opportunity to participate in India’s economic growth story while controlling risk and minimizing drawdowns by fully capitalizing on our macro top-down expertise.”
He further explained, “The Tresor Smart Alpha strategy, which focuses on Equity ETFs, presents significant advantages over strategies with concentrated stock exposure. For instance, during the 2020 Yes Bank meltdown, the NIFTY Bank Index showed stability, highlighting the benefits of sector-wide exposure. Similarly, we saw that indices and sub-indices eventually recovered and reached all-time highs after the 2008 financial crisis and the COVID-19 pandemic, while many individual stocks went into oblivion as regime changes inevitably followed each economic crisis. ETFs provide greater diversification, helping to reduce risk and volatility, allowing investors to benefit from overall market growth while mitigating company-specific risks. This makes it a more stable investment choice, particularly in uncertain times. With our unique macro top-down skill sets, we aim to outperform a standard ETF-focused portfolio by controlling beta and reducing standard deviation.”