Pace 360 has unveiled its groundbreaking ETF-based Portfolio Management Service (PMS) strategy, the Tresor Smart Alpha fund. This innovative approach targets overlooked equity ETFs that offer exposure to transformative long-term themes and undervalued sectors of the Indian economy.
The Tresor Smart Alpha fund employs a dynamic asset allocation strategy designed to maximise alpha relative to benchmarks while managing beta to optimise risk-adjusted returns. By investing in a curated selection of quality ETFs, the fund aims to capitalise on market upswings and provide protection during downturns. This approach focuses on sectors with superior earnings growth, high profitability, low leverage, and consistent cash flows compared to peers.
Amit Goel, Co-founder and Chief Global Strategist at Pace 360, highlights, “With Tresor Smart Alpha, we offer investors a unique opportunity to engage in India’s growth story while controlling risk and minimising drawdowns. Our strategy leverages macro top-down expertise to harness the potential of ETFs.”
The Tresor Smart Alpha strategy offers notable advantages over traditional concentrated stock approaches. For instance, during the 2020 Yes Bank crisis, the NIFTY Bank Index exhibited stability, underscoring the benefits of sector-wide ETF exposure. Historical recoveries of indices and sub-indices after events like the 2008 financial crisis and the COVID-19 pandemic further demonstrate the resilience of diversified ETF investments compared to individual stocks.
Goel adds, “ETFs provide enhanced diversification, reducing risk and volatility while allowing investors to benefit from market growth and mitigate company-specific risks. This makes ETFs a more stable investment choice, especially in uncertain times.”
The Tresor Smart Alpha fund adjusts its investments based on macroeconomic indicators, market cycles, and thorough analysis of sectors. The strategy aims to maintain a beta below one during overvalued market phases and above one when markets are undervalued, seeking to offer superior risk-adjusted alpha. The fund’s diversified ETF investments span various sectors, including automotive and financial markets, providing robust growth potential with managed risk.
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