Samco enters MF biz
New Delhi: Samco Asset Management on Tuesday announced the launch of its mutual fund business and said it plans to introduce schemes with high active share. In addition, the asset management company (AMC) said only those companies that pass its stress test framework will find a place in its schemes of portfolio. The announcement comes after Samco received final approval from capital markets regulator Sebi on July 30, 2021 to launch mutual fund business. Jimeet Modi, founder and director of Samco Asset Management said,"We are going to file scheme documents with Sebi today evening and after getting approval from the regulator we will launch our first scheme".
He further said the AMC will launch its first scheme in flexi cap category, followed by global active fund. "We are expecting to launch our first fund in 90-120 days," he said at a virtual press conference. Speaking about stress tested investing, Modi said it is a strategy to put to work money with businesses that can endure and survive in a variety of stressful situations and generate long-term risk adjusted returns. Each business is put through a series of six rigorous tests defined by Samco's proprietary HexaShield framework and only businesses that pass the test will form a part of the investable universe.
The framework is designed to test whether a business can survive across a variety of macro and micro economic pressures and truly be a compounding machine. The six parameters of stress test are reinvestment and growth, corporate governance and leadership, cash flow, balance sheet and debt, competitive strength and pricing power and regulatory. "Most listed companies end up failing the stress test. In fact, only 15 out of Nifty 50 index constituents pass Samco's stress test framework. Only a limited number of companies that pass the stress test certified via the HexaShield framework will find place in the Samco Mutual Fund's scheme portfolio," Modi said. These stress tested businesses have demonstrated capabilities to generate much superior risk adjusted returns. Samco Mutual Fund will transparently disclose daily active share to investors, so they know that when they are paying an active fee, it's certainly for buying something widely different from the index.