Capitalmind Wealth (Wizemarkets Analytics)

Funds managed

S/NProduct name Style/ FactorSectorLicence
1Fixed Income Govt debt, AA, AAA PMS
2High Priced (Sticker Shock)QualityLarge-capPMS
3Long-termGrowthMulti-capPMS
4Market FundPassive Large-capPMS
5MomentumMomentumMulti-capPMS

About

  • Wizemarkets Analytics Pvt. Ltd is a quantitatively driven portfolio management services firm which was founded by Deepak Shenoy in August 2014. It is unique as the only firm we have encountered so far with a dog as a core member of their team. The dog is called Coco and is said to- “ be the boss who keeps everyone on their toes”. 
  • Wizemarkets Analytics renders portfolio management services under the Capitalmind Wealth brand. Capitalmind Wealth had previously been founded by Deepak Shenoy in July 2010 as an investment research firm.
  • As at June 2020, Capitalmind Wealth had 20+ operations staff and 2 fund managers.The company is a licensed Portfolio Management Services provider by the Securities and Exchange Board of India (SEBI).

Key staff

Deepak Shenoy – Founder, CEO & CIO ( August 2014 to present). Deepak previously founded two startups, Agni Software (1998) and Moneyyoga (2007). In 2009, he was a consultant for Estee Advisors and built the firm’s algorithmic trading strategies, risk models and financial reporting framework. Deepak has a degree in Computer Engineering from National Institute of Technology Karnataka Suratkal. He has some 20 years of experience in the financial industry and is a SEBI-registered research analyst. LinkedIn

Anoop Vijaykumar- Head of Research & Fund Manager (October 2019 to present). Anoop has over 17 years of international experience in consulting, strategy and operations. He earned his first degree in Engineering from the University of Mumbai and has a Postgraduate Degree in Marketing (PGDM) from the Indian School of Business (ISB).  LinkedIn

Investment philosophy (for firm)

Investment approach- The investment philosophy for each of Capitalmind Wealth’s funds is clearly spelt out and the firm indicates a high dependence on technology and algorithms in their security selection process. 

PMS process-

Capitalmind Wealth depends on signals from their proprietary algorithms for security selection and portfolio rebalancing. The firm follows a top-down process to security selection and prioritizes asset allocation and position sizing above security selection. The firm’s technology and algorithm driven stock selection process is comprised of 3 steps as shown below-

Source – Capitalmind presentation

Exit process- Capitalmind Wealth continues holding securities in the portfolio until the factor signals from their algorithms fade, at which point the securities are replaced. 

Fund performance

Time-weighted rates of return (TWRR) are presented for each of Capitalmind Wealth’s funds following SEBI guidelines. The returns are normalized NAVs generated using daily returns of aggregate portfolio values across all clients. The returns are post all fees and expenses, and include cash holdings and investments in liquid funds yet to be deployed.

  • Fixed Income
  • High Priced (Sticker Shock)
  • Long-term 
  • Market Fund
  • Momentum

Media

Secrets behind chart topping returns- Deepak Shenoy, Amit Jeswani, Raskshit Ranjan & V. Jayaram. PMS Bazaar, 11th December 2020

Capitalmind Wealth’s momentum strategy is described by Deepak Shenoy in this panel discussion. He mentions that  they use a purely quantitative filter to invest in stocks whose prices and volume have momentum. Although they include filters to avoid small stocks, low volume stocks and exit once they detect decreasing momentum. He does admit that the strategy does not generate returns for each and every call but, on average, the fewer high performing stocks make up for the bulk of the less performing stocks. Shenoy disclosed their practice of shifting allocations to cash when the momentum algorithm signals no opportunities in the market. On sector rotation he emphasizes that it is a consequence of their rules-based strategy and is fully determined by their algorithms. 

This star fund manager explains how ‘Algo’ system helped survive March crash. MoneyControl, 18th August 2020

https://www.moneycontrol.com/news/business/markets/this-star-fund-manager-explains-how-algo-system-helped-survive-march-crash-5719241.html

Anoop Vijaykumar shares his firm’s investment philosophy as being built around a systematic rule-based investment approach as opposed to investing based on discretionary calls.  He explains his belief in the consistent application of a robust set of rules outperforming purely discretionary portfolio management approaches. 

Ask me anything with Deepak Shenoy. CapitalMind, 17th October 2019

Speaking about the evolution of his investment philosophy over the years, Deepak Shenoy indicates his new found identification of value in securities he would have considered too highly priced. He maintains that certain securities are highly priced because of future growth in which case the  relatively highly priced stock is justified.  On making cash calls due to negative economic events, Shenoy shares his caution in reacting to the sensationalism in news. He explains that instead of shifting allocations to cash, allocations are made to stocks which are deemed to provide risk adjusted returns as a result of economic events.

Analyst assessment and questions

  1. Why does Capitamind Wealth have 5 distinct funds? How much alpha do you expect to add from each of the funds?
  2. Do you have an overall investment philosophy Capitalmind Wealth? How do you add value to your quantitatively driven process?
  3. Have you ever lost money and/ or had to take charge of your rule-based process?
  4. What are the reasons behind your choice of benchmarks for your funds?
  5. Capitalmind Wealth has two fund managers across a total of 5 funds, do you have any plan in place to take care of key-man risk?

Prepared by – Adza Stella Vajime

Date – 31st March 2021

Peer reviewed by –

Date –

NB

Useful links-

Performance- https://observablehq.com/@capitalmind/capitalmind-wealth-portfolio-navs 

Capitalmind itself- https://www.capitalmind.in/about/ 

Website link- https://www.capitalmindwealth.com/ 

Tel- +91 80 4121 1210

Email- [email protected] 

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