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HindustanTimes Sun,13 Jul 2014

IIM-L students’ Fund outdoes Nifty in returns ring

HT Correspondent, Hindustan Times  Lucknow, February 22, 2013
First Published: 13:06 IST(22/2/2013) | Last Updated: 13:09 IST(22/2/2013)

Investment isn’t a perfect science. But, if one follows a strict discipline and avoids excessive risk-taking, one can reap profits even against all market odds.

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This comes straight from IIM-L students, whose Credence Capital continues to register unimaginable growth in the market despite ongoing economic downslide. It has outperformed NIFTY sixth year in a row.

The aspiring managers generated a handsome return of 20.10% on their equities fund compared to the NIFTY’s 18.6% rise. Even more impressive was the performance of the derivatives fund, which generated 29.8% returns over this period.

Talking about the financial success story, Devvrat Mohta, one of the team members, says, “What’s important is to know that our decisions may go wrong. So get out when you find your decision going wrong. It is psychologically tough, because it hurts peoples’ ego to accept they are wrong.”

But, this is how the club members operate. The accept-mistake-and-switch makes it easy for the managers to quickly move on towards profit investments. “Strict discipline and avoiding excessive risk are the key word. The aim to preserve the capital,” he says.

The fund was launched in October 2011, with the tremendously successful “Operation Bottom Fishing”, a theme which reflected the attractive valuations and opportunities available in the market.

The eight fund managers, whose investment philosophy ranges from value-investing to exploiting arbitrage opportunities and to derivatives trades like covered call strategies, diligently managed the pool throughout the two years and have ended their term by decisively outperforming the markets, generating handsome rewards for all their investors.

The incoming batch is set to uphold this legacy, as evidenced by their whopping quarter 1 results where they achieved annualised returns of 33.14% and 52.52% in the Equities and Derivatives portfolio respectively.

The B School community across different campuses also seems to be inspired by their success.

Another team member Shraddha Gupta says, “We really welcome this trend and would be happy to offer active support and mentorship to any other campus.”

The potential managers underwent a month long selection procedure where they were tested for their ability to analyse and select companies.


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