Our approach
Approach to Capture the Transition
Translating current domestic and global macro conditions into investment themes.
Investment process
Top-down, macro driven
Identify core macro themes
- Drivers of India's transition
- Supported by global tailwinds
- Avoid areas with disruption risk
Sector and stock selection
- Visualise the evolution of each theme
- Identify sectors to capture the themes
- Select around 30 stocks from those sectors
Core portfolio creation
- Allocation to themes, sectors and stocks
- Risk / reward and liquidity are key factors
- Use market volatility to time buying
Upside / downside beta
- Tactically manage beta risks
- Stock baskets for upside beta risk
- Cash and hedges for downside risk
Rebalance or sell decisions
- At stock, sector and theme level
- Macro, fundamentals and positioning
- Index weights as a guiding metric
Framework
Framework to identify macro themes
India specific drivers
The convergence of economic, social and political interests, the direction of government policy and its execution on the ground, and where investors are positioned today against the opportunities ahead.
Global tailwinds
Financial markets, cross-asset relationships and fund flows, the effect of geopolitics on policy choices, and the relevance of each portfolio theme in the global context.
Impact of technology changes
Whether a technology is likely to support the growth and productivity of incumbents or to disrupt them, and its impact on human development, assessed for every theme considered.
Macro investment themes
Combining Indian and global scenarios into actionable investment themes
Strategic capabilities in manufacturing
Geo-economics and geopolitics require manufacturing supply chains in strategic industries.
Modernization of agriculture
India needs agricultural sector growth to create farm jobs and exports in a de-globalizing world.
Infrastructure to enable growth
Tariffs require control over transport and logistics. Hard assets are growth engines and stores of value.
National Champions in Strategic sectors
Secure energy and critical mineral supply from multiple sources. Conglomerates drive private capex.
Digital infrastructure and ecosystems
Digitalization enables financial inclusion, needs digital infrastructure and creates service jobs.
Human capital support and services
Skilling, healthcare and financial security are crucial. Travel, leisure and retail create mass jobs.
Mapping sector preferences versus the benchmark
Sectors capturing the themes were neglected from 2008 to 2021
Asset heavy sectors
Drivers of the current macro regime, our preferred sectors
Asset light sectors
Drivers of the previous macro regime, outside our focus
Asset heavy sectors
- Communication services
- Diversified conglomerates
- Metals and minerals
- Oil and gas, agrochemicals, fertilizers
- Power and industrials
- Real estate, infrastructure, EPC and logistics
Asset light sectors
- Banks and financials
- Cement, paints, building products
- Consumer staples and discretionary
- IT services
- Pharma, healthcare and chemicals
Source: NSE India, Nifty Indices. Index weight alone does not establish undervaluation.
Infinite Circles Asset Managers LLP is the investment manager of the Macro Transition Fund, a Category III Alternative Investment Fund, SEBI registration number IN/AIF3/25-26/2002. This page describes the investment approach in general terms and names sectors, not securities. It is not an offer to sell or a solicitation to buy units of any fund, and no return is assured.
Contact
Investor enquiries
Investment enquiries, the strategy presentation and fund information.