First Global is renowned across the world for being deeply data driven, in its investment approach. We are unemotional about investing. We don't get romantic about it. We view it for what it is: a vehicle to get rich, while minimising risk. So why does our investing model work across cycles and markets?
The most common investment myth that is peddled day in and day out, is that diversification is the enemy of high returns.
In reality concentrated portfolios are a recipe for disaster more often than not.
Any fund manager who professes to run deeply concentrated portfolios is going to be a fund manager who will do well for sometime and then flame out when even one or two stocks in the portfolio run into bad weather.
At First Global, our research and learnings have been exactly to the contrary.
As a result of our strategy of diversification, we have found that you can generate tons of alpha without adding proportionately to risk.
Across market cycles.
Another common myth that is heard all the time is that to make high returns, you have to take high risk.
Nothing could be further from the truth.
Our research and findings are again to the contrary.
First Global has simplified the confusing world of investing, into an elegant, simplified, yet deeply researched, Investment Model.
The Model is called Return and Risk Optimization (RARO) Model of Investing.
What is the RARO Model?
It has taken us decades to figure this out. And frankly, it's a tad complicated.
But let us simplify it for you.
Taking off from Nobel-winner Markowitz's Modern Portfolio Theory (MPT), First Global has innovated on this.
And discovered that a newer, far more efficient frontier exists in investing, wherein you can actually maximize return while minimizing risk.
Don't ask us how. Because that's our secret sauce. Tons of data have been mined, hundreds of patterns have been detected. Conclusions have been built.
Suffice it to say that this is what the RARO Model is: finding the best investment ideas, in India and across the world, that give virtually" free" alpha, ie , high return but without adding to units of risk.
Again, most fund managers approach the business of investing as they would approach a romantic affair: you fall in love with your stocks. You overlook even the most obvious danger signs.
And you hang on to the bitter end.
We are neutral. Unbiased. Unemotional.
If we see a problem in a portfolio stock, or in a sector, or in a country, we will be out.
There will be no rationalizing.
This makes our approach robust. It makes our approach less risky.
All of it makes for sustained investment performance.
First Global's Investment Management Products span the world. Including India.
And three decades of investing experience have given us one - yes, one-central learning : That top down, Asset Allocation-Country Allocation- Sector Allocation, determines 90% of your returns.
Bottom up stock picking adds just 10% value!
And all the noise you hear is only about "great stock picks".
We have morphed this learning into the Risk and Return Optimisation ( RARO) Model of Investing, which we have explained above.
Our IMAAP (Indian Multi-Asset Allocation Portfolio) Product has been carefully designed to get you the highest possible return for a given, diversified level of Risk.
Taking exposure across major Indian Asset Classes, the IMAAP seeks to deliver consistent, low beta, return, based on top down allocation decisions
The IMAAP is part of First Global's Single Window - All Weather (SWAW) Investment Products. The IMAAP's core strategy follows our central learning that nearly 90% of returns in Investing, come from getting the Top Down Asset Allocation right.
Specific stock selection adds only 10% or so to the returns.
Hence, the IMAAP invests across across Asset Classes: Stocks, Bonds, Commodities, REITsetc available in India.
The weightings of each Asset Class in the Portfolio is adjusted dynamically and tactically, depending on the relative attractiveness of each Asset Class.
The objective of the IMAAP is to deliver steady, low volatility returns.
The IS50 is a curated list of the best 50 stocks in the Indian stock market, at any given point in time.
These stocks are identified from a larger list that is thrown up using cutting edge Artificial Intelligence and Machine Learning technologies, that comb through mountains of financial data, annual reports, conference call transcripts, press coverage, social media chatter, macroeconomic data, quantitative sentiment indicators, etc.
The AI- ML approach enables us to remain completely neutral, unbiased, unemotional about our selection.
And it also makes us remain absolutely clinical in our exit strategy .
To this constantly evolving list of stocks, we apply a patina of our decades of human Intelligence.
This combinatorial approachmakes us come up with a list of 50 stocks that are best positioned to capture nearly every single alpha generating move in the markets.
The results? Click here to take a look
Let's be clear: if you are not diversified globally, you will suffer SCAARS. That is: Single Country, Single Currency, Single Asset Risk.
See this Graph below. As is crystal clear, investing in India has delivered abysmal returns in US Dollar terms.
Avoid SCAARS with First Global's two Global Investment Products.*
Remember:There is always a bull market and a bear market, in some asset class, somewhere in the world...at the same time!
The GMAAP is meant for Investors who wish to invest between USD 10,000 to USD 99,000 in Global Asset Allocation Investing.
It's part of the First Global Family *of SWAW (Single Window-All Weather) Managed Investment Products, which also includes the Global Freedom Fund (GFF), which is meant for Investors with over USD 100,000 to invest.
The GMAAP is a Multi Asset Portfolio,that invests across all major Asset Classes across the world, delivering reasonable, steady, low volatility USD returns, between a target compound annual return of USD 8-12%.
A 8-12% US dollar return translates to between 12-16% return in Indian Rupee terms.
The key lies in First Global's systematic approach called Risk and Return Optimisation (RARO).
In this, we comb the world, looking for opportunities across Asset Classes, across the world, and invest in them.
For example, the GMAAP will have exposure to Global Equities, Global Fixed Income, Global REITS, Global Commodities.
The weightings for each Asset Class is changed dynamically and tactically, based First Global's analysis of the relative value of each Asset Class.
Our central learning over 30+ years is that top-down, global asset allocation based Investing works excellently in delivering long term dollar compounding.
In fact, far better than bottom up, stock centric strategies, as tons of Investment Research show.
The Global Freedom Fund is an international fund, based out of Cayman Islands.
The GFF is part of First Global's Single Window-All Weather (SWAW) Investment Products.*
The Global Freedom Fund targets steady, low volatility, US Dollar return CAGR of 9-14%, which equates to INR returns of 13-18%.
The GFF uses First Global's proprietary Risk and Return Optimisation (RARO) tech, which seeks to deliver enhanced, "excess" return for a given level risk.
Using the RARO technology, we are able to pick extra Alpha, available virtually "free of additional risk".
The GFF's core strategy follows our central learning that nearly 90% of returns in Investing, come from getting the Top Down Asset Allocation (markets, asset classes) right.
Specific stock selection adds only 10% or so to the returns.
Hence, the GFF invests globally across markets, across Asset Classes: Stocks, Bonds, Commodities, REITs.
The weightings of each Asset Class in the Portfolio is adjusted dynamically and tactically.
The objective of the GFF is to deliver steady, low volatility returns, with an ability to capture "excess risk-free return" available throughout the world, because of market inefficiencies.
Economists Think Dollar's Fall May Explain the Recent ‘Rally’ by Steve Liesman
Einstein taught us about relativity in nature. Now come Devina Mehra and Shankar Sharma of First Global to teach us about relativity in financial markets -- and raise some serious questions about just what is driving stock prices.
The Alchemist of Dalal Street Shankar Sharma has an eye that is quick to spot seemingly junk shares that eventually turn out to be gold.
Never underestimate the importance of pragmatism, Sharma says. “Don’t get emotional about investments. It’s all about timing; enter and exit an investments at the appropriate time."
First Global reports are quite credible and, on occasion, more than that.
What prompts this mention is Intel's earnings report and the fact that First Global has had a pretty good bead on the company and its stock.
AMD up again following First Global upgrade to ‘buy’ (AMD) By Tomi Kilgore
Analyst Kuldeep Koul at First Global upgraded Advanced Micro Devices (AMD) to "buy" from "outperform," given the "exceptional traction" that the chipmaker's Opteron line of processors has been able to get.
Baidu Climbs on First Global’s ‘Outperform’ Outlook
Baidu Inc., the operator of China’s most-used Internet search engine, rose to the highest price in two weeks after First Global rated the shares “outperform? in new coverage.
Personality counts: Walmart's frugal, but Target charms
"It's better to take a slight hit on [profit] margins and keep on moving and inventing," says First Global Securities. And at least for now, Target is inventing in a way that appeals to consumers with money to spend.
At 11 times trailing earnings, Energizer is cheaper; Gillette's multiple is 25. But cheaper doesn't mean better, says First Global.
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