Impact Expertise

  • Macro-Economic

  • Fundamental

  • Quantitative

  • Technical

Impact Expertise

Impact AM Model uses fundamental, technical, quantitative and macro-economic metrics to identify value and predict trend direction.

Macro-Economic

Big Picture

Macro-Economic Model - looks at the broad macro-context within which equities perform. Though macro-economic factors do not affect equity markets in the short-term, they provide the framework for all growth.

Fundamental

Value Context

Fundamental Model - identifies the actual value inherent in the price of equities based on the company's business and financial performance. The fundamental value of the stock sets the broad value range within which the prices oscillate.

Quantitative

Trend Identifier

Quantitative Model - identifies the intermediate trends in the market which cause the prices to oscillate between the broad ranges. The model also considers linkages with other markets such as global equities, bonds, currencies, commodities and credit markets.

Technical

Short-Term Levels

Technical Model - identifies the short-term price movements for entry and exit of positions and apart from traditional technical analysis also looks at underlying derivatives and options data.

Fun facts

  • New York Stock Exchange was created in 1792 by a group of two dozen stockbrokers and store owners gathered under a tree

  • 1948 Formation of the first hedge fund by Alfred Jones

  • 9000 Indian stock markets have the largest number of listed companies in the world

  • At the height of tulipmania in 1635, 40 bulbs were sold for an equivalent of 1 million euros

Impact Technique

Impact AM Model assumes that markets are cyclical within broad bands and not linear, and hence maximization of profits can be achieved by following a long-short strategy rather than a pure buy-and-hold strategy.

  • Cyclical Markets

    Impact AM Model assumes that markets are cyclical within broad bands and not linear, and hence maximization of profits can be achieved by following a long-short strategy rather than a pure buy-and-hold strategy.

  • Monthly Returns

    Even in secular bull markets, prices correct frequently update data

  • Price-Earnings Ratio

    Even in terms of valuation, markets frequently get over-valued and under-valued

Superior Returns at Low Risk
Therefore, Impact AM uses fundamental, technical and quantitative metrics to predict cyclical trends and then uses a long-short strategy to maximize profits. As a result, Impact’s returns have outperformed the market indices by 16.7% during 2011-14 at a risk level lower than the market. During the same period beta was -0.14 and volatility was lower than all risk assets.

Why Equities

Why Equities

Equities as an asset class, offer the best returns in the long term

  • Equities are Wealth-Creators

    So, over a 10-Year period, investment in equities can expand wealth significantly – almost 5-6 times and faster than other asset classes.

  • Annual Returns

    Equities have generated positive annual returns in 10 of the last 12 years

  • Equity Volatility

    Though returns on equities appear volatile in the short-term (+66% to -30% for 1-year period) this volatility disappears as the holding period increases( +35% to +0% for a 5 year holding period). With active fund management, this volatility can be narrowed even further

  • Steady Growth in Equities

    The 5-year CAGR for the Nifty Index rarely goes below zero – even in a bad year like 2008.

Quotes

“What we are looking for are Good profitable businesses, with an Able management and available at a Reasonable price.”
- Warren Buffet

“Frankly, I don’t see markets; I see risks, rewards, and money.”
- Larry Hite

"There is only one side of the market and it is not the bull side or the bear side, but the right side..”
- Jesse Livermore

Team

Impact Asset Management is managed by qualified and experienced professionals from IIT's and IIM's with wide experience in Banking and Investments in India, Asia and US.

Resources

We publish our insights and those of external experts to help advance the practice of management and provide leaders with facts on which to base business and policy decisions. Views expressed by third-party authors are theirs alone.

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