Quant Process FAQs

The PPP Process stands for Price, Profits, People and is central to Turtle Wealth’s investment strategy. It ensures a comprehensive evaluation of stocks by focusing on three key factors:

Price: Stocks are evaluated based on All-Time High (ATH) prices after long periods of consolidation.
Profits: We prioritize companies that are consistently delivering ATH profits, signalling strong financial health.
People: We assess the management team through scuttlebutt research and meetings to ensure that the leadership is aligned with shareholder interests.
This three-pronged approach creates a well-rounded view of the company, combining both quantitative and qualitative factors

The Biggest Money over the last 100 years have been made in 2 Factors: Turnaround Story and Longer Term Trends. One proven way to identify such opportunities is by buying stocks at their All-Time High (ATH) after a long-term consolidation, often spanning a decade. Our quantitative analysis shows that while these opportunities are rare, they can create significant value over time.

Of all the fundamental aspects we consider, Profit After Tax holds the greatest importance. Achieving ATH in stock prices alone isn’t sufficient; there must be a solid financial foundation behind it. Turtle Wealth focuses on stocks with All-Time High profits because they indicate robust financial health. When a company reaches ATH in profits, it typically supports the stock’s price increase, reflecting strong operational performance and financial stability.

To outperform the benchmark, we believe that one needs to invest in stocks that are already outperforming the BSE 500. By selecting stocks that demonstrate consistent outperformance against the benchmark index, Turtle Wealth aims to deliver market-beating returns, ensuring that the portfolio remains in line with top-performing stocks.

Turtle’s approach emphasizes that value should exceed price. This occurs when a stock’s price has been range-bound, but the company’s profits continue to rise steadily, reaching new ATHs. This discrepancy between the rising profits and the relatively slower price increase creates an opportunity, indicating that the stock is undervalued relative to its true financial potential.

Turnaround companies offer unique opportunities for growth. These are businesses that may have faced challenges in the past but are now entering a new phase of recovery due to structural changes, new projects, or business improvements. Investing in turnaround stories allows Turtle Wealth to capture the company’s maximum growth potential as it returns to profitability or expands significantly.

Yes, a stock that has performed well over a long period may still be included in a new client’s portfolio, even at an elevated price, provided it meets Turtle Wealth’s strict quantitative criteria. However, the allocation for new clients may differ. We ensure that no stock exceeds the maximum risk of 1.2% of the invested value, and allocations are adjusted dynamically to manage risk effectively. This way, we create portfolios with tailored allocations to suit the client’s specific risk profile and market condition.

Yes, the stop-loss levels for stocks are periodically updated. When a stock makes a new high and forms a new support level, we apply a trailing stop-loss, which adjusts to lock in profits while managing risk. Typically, you can expect a revision every 2-3 months. The frequency of updates varies based on the stock’s price movement—it could be longer or shorter than the stated interval. However, we ensure that the process is followed diligently.

No, we do not follow the model portfolio approach. At Turtle, our quant system is designed to create customized portfolios for each client. For instance, a new client may hold different allocations in the same stocks, or if a stock is not suitable for a new buy (based on its rating or current situation), we may choose to exclude it. When stocks have risen significantly, we adjust allocation percentages to ensure proper risk management. Essentially, every client’s portfolio is uniquely customized to align with their specific investment needs at the time.

Yes, we may re-enter the stock. However, the decision is purely data-driven. If the stock performs well again and passes our quantitative criteria, we are open to investing in it once more.

We have a structured process for allocation that helps us manage risk per stock, typically limiting it to 1.2% of the total invested value. Once the entry and exit points are defined (with the exit acting as the stop-loss), the system automatically calculates the allocation. For example, if a stock has an entry at ₹100, an exit at ₹80, and a maximum allowed loss of 1.2%, the system allocates 6% of the portfolio to that stock. This ensures risk is well-managed, based on predefined limits for both entry and exit.

In our process, the allocation of a stock can only be determined once we have finalized its exit point, which serves as our stop-loss. This approach allows us to manage risk effectively across the portfolio. We’ve realized that while everyone focuses on finding the best entry point, very few know when to exit, which is a critical part of our strategy. By setting the exit price in advance, we ensure the allocation aligns with the potential risk, providing clear boundaries for both entry and exit.

We base our exit prices on the stop-loss rather than a target price. At Turtle, we don’t believe in limiting the potential of a company with a target price, as its future growth could be limitless. The stop-loss helps us manage risk and ensures that we protect the downside, allowing the stock to grow without predefined upper limits unless other factors indicate it’s time to exit.

Turtle’s quant process involves 3 key phases:

  1. Selection & Research:  We use a quant-based model to rank and identify the best investment opportunities from a defined universe. Our quality check ensures only companies with strong corporate governance are selected.
  2. Allocation & Risk Management: After selecting the stock, we allocate capital and manage risk with our robust Quantitative Allocation Process and Risk Management System that work seamlessly together to optimize the portfolio.
  3. Holding Review: Once stocks are added to the portfolio, they undergo regular review to ensure they continue to align with our investment strategy

The rationale for limiting the universe to 500 stocks is to focus on quality companies with proven track records, ensuring better transparency and liquidity. By narrowing the stock selection, we can concentrate on businesses that are less likely to experience extreme volatility or unexpected issues. This helps manage impact costs and allows for efficient portfolio management by focusing on well-established companies with adequate market volume.

The holding period of a stock is highly dynamic and entirely dependent on its performance. Our simple formula is: Hold the Winners, Exit the Losers.

We perform regular portfolio reviews on weekly basis to ensure that allocations are properly adjusted, especially after onboarding a new client, receiving a top-up, or managing existing client portfolios. Our QUANT process follows a dynamic allocation strategy, ensuring proper risk management and alignment with client goals.

Our process is entirely in-house, meticulously managed by a highly skilled team with years of experience in fund management. Over time, we have carefully developed and refined this process, making it more robust, transparent, and efficient. Each step has been improved through continuous learning and adaptation, incorporating key insights gained from both successes and challenges.

Meet the Experts Managing Your Investments: https://turtlewealth.in/our-team/

We follow a dynamic allocation process to ensure investments are made at the optimal time, aligning with market conditions and effective risk management. Instead of rushing into risky positions, we carefully adjust allocations to balance the opportunity cost of holding cash with the risks of uncertain markets. This strategic approach allows us to capture better opportunities and aim for stronger returns.

FAQs

Portfolio Management Services (PMS) is a SEBI-registered personalized investment service where a professional manager handles your money, investing it in stocks or bonds based on your goals and risk level. It’s typically for investors with a higher amount to invest, with a minimum investment requirement of ₹50 lakh, offering more tailored strategies than mutual funds. SEBI ensures that PMS firms operate within regulatory frameworks to safeguard investor interests.
SEBI, or the Securities and Exchange Board of India, is the regulatory authority that oversees PMS firms, ensuring they follow rules to protect investors’ interests. It enforces compliance and transparency in the management of personalized investment services.

 Professional Management ─ Expertly managed portfolios with a bespoke approach, tailored to investors’ specific financial goals, aimed at consistent long-term performance with controlled risk.

 Continuous Monitoring ─ Portfolios are regularly adjusted to optimize returns based on market conditions.

 Hassle Free Operation ─ All administrative tasks are managed by the service provider, ensuring smooth and stress-free management.

 Transparency ─ Detailed performance reports, regular updates from the firm, and web-enabled access keep investors fully informed at all times.

 Customized Advice ─ Personalized investment strategies tailored to meet individual financial goals and needs.

Aspect

Mutual Funds (MF)

Turtle Wealth’s PMS

Investment Model

Model-based investment tool, suitable for SIP investors.

Bespoke approach, tailored to HNIs’ specific financial goals.

Portfolio Composition

Invests in a larger number of stocks, offering diversification.

Takes a concentrated approach, targeting selected opportunities.

Portfolio Type

Model Portfolio

Structured, Customized Portfolio

Access to Fund Manager

Limited direct access

Direct access to the Fund Manager

Returns*

Historically designed to provide market-based returns

Focuses on higher, consistent long-term returns tailored to risk.

Investment Suitability

Preferred for investments below ₹50 lakh

Preferred for investments above ₹50 lakh

Fund Manager Vision Alignment

Fund manager’s vision, no direct involvement

Fund manager aligns with investor’s personal vision

Transparency

Limited transparency with standardized reports provided periodically.

Full transparency with access to detailed stock holdings for each investor.

*Investments in the securities market are subject to market risks, and there is no assurance or guarantee that the objectives of any investment portfolio will be achieved. Past performance is not indicative of future results.

  • For our Wealth Mantra and Growth Mantra portfolios, the minimum investment required is ₹50 lakh, which must be contributed in one transaction.
  • For our Profit Mantra portfolio, the minimum investment is ₹1 crore.
  • Note: The minimum of ₹50 lakh must be contributed under a single PAN card in one transaction for all portfolios.

An ideal Turtle PMS client can be an individual, partnership, HUF, NRI, private or public limited company, LLP, or trust, who:

  • Values personalized investment management.
  • Seeks steady, long-term wealth growth.
  • Is comfortable with market fluctuations, including a potential 20% drawdown.
  • Has realistic expectations, aiming for consistent returns rather than quick gains.
  • Invests their own capital (not borrowed).
  • Can commit to a 5 to 10-year investment horizon.
  • Understands the fund’s process and shares the vision of the fund manager.
  • 100% Quant Based Investment Process
  • Investment in Human Friendly & ESG Compliant Business
  • Easy Access to Top Management
  • Client Friendly Fee Structure
  • 100% Focus + Ownership
  • Quarterly Review & Masterclass
  • Yes, after an initial minimum investment of ₹50 lakh, you can invest additional amounts in any multiples and at any time intervals.
  • Yes, you can withdraw periodically, provided that the remaining balance does not fall below ₹50 lakh. If the balance drops below ₹50 lakh, you will be required to withdraw the entire amount.
  • Key person risk is the potential impact of losing a crucial individual like the Fund Manager. However, Turtle PMS is built on a quant-based, rule-based structured system that ensures our processes and strategies continue seamlessly, even in the Fund Manager’s absence. If Turtle were to close, your assets remain safe in your Demat account under – Orbis Financial Corporation Ltd., our custodian, ensuring uninterrupted management of your portfolio.
  • Orbis Financial Corporation Ltd.is the custodian for Turtle PMS. They manage the safekeeping of your assets and ensure all administrative and operational processes are handled securely and efficiently.
  • For Individual, it takes 3-5 working days.
  • In the case of NRI, Corporate, LLP, HUF or Trust, it takes 10-15 working days.
  • The Demat account will be opened with Orbis Financial Corporation Ltd., with NSDL (National Securities Depository Limited) serving as the depository.

We have two types of account opening processes: Online Onboarding for Individuals and Physical Onboarding for Non-Individual (NRIs, Corporates, LLPs, HUFs, or Trusts.)

  • Individual Account Opening:
    For individuals, we use the SILVERBULLET platformfor an efficient online onboarding process. This typically takes 3-5 working days. The process is simple: you’ll need to provide a few documents and complete OTP/email confirmations. Our team will guide you through each step, ensuring a seamless and hassle-free experience.
  • Non-Individual Account Opening:
    For these categories, we use a physical onboarding process, which takes 10-15 working days. We handle the preparation of all required documents, which we send to you for signatures and stamps. Our trained team ensures a smooth experience by guiding you through each step of the process.
  • Know More – link to it – https://turtlewealth.in/client-onboarding-process
  • Pooling funds in PMS allows for faster execution, lower costs, and streamlined management. This approach reduces fees and administrative burdens while ensuring personalized allocation through unique client codes. It enables effective strategy implementation, scalable investments, and compliance, all while delivering tailored portfolio management.
  • Yes, you will be appointed a Relationship Manager (Wealth Manager) who will take care of all your needs.

Tab: Schedule a Meet Now – link to it – https://calendly.com/contact-htbl/30min?month=2024-09

  • NO, we do not have a lock-in period in place. However, we believe that one should consider it as a long-term investment with a 5-10 year horizon.
  • We give extreme importance to client interaction and updates:
  • Every month, you will receive an email from Orbis (Orbis Financial Corporation Ltd.) with a detailed portfolio status.
  • Every quarter, within the first 15 days, a Zoom review called “PMS Showcase” is held by the Fund Manager.
  • We also provide regular updates on stock-related news, corporate announcements, and any relevant market developments.
  • Whenever needed, a “1 to 1” review can be scheduled, based on your booking.
  • Yes, you will be given a PMS login, which provides access to all reports and the fund value 24/7, 365 days a year.

Tab: PMS Login – https://www.orbisonline.in/portal/Account/login.aspx

  • We offer a comprehensive suite of value-added services to enhance your investment experience, including:
  • Investing Masterclass
  • WhatsApp Investor Community
  • Entry & Exit Note of Stocks
  • PMS Quarterly Review
  • Dedicated Service Manager
  • Digital Onboarding
  • Quarterly Result Update With Commentary
  • We love our Clients more than our Companies
  • Yes, we have developed a robust, Quant-Based Investment Processdesigned to generate exceptional ALPHA. Our approach ensures that every investment decision is Data-Driven and free from Human Biases, allowing us to consistently identify high-potential opportunities in the market.

Know More – link to it – https://turtlewealth.in/turtle-quant-process/

  • We typically buy an average of 15 stocks, following a robust risk management process to ensure optimal allocation.
  • No, there is no overlap in stocks between the two funds.
  • We are very mindful of managing the churning in the fund. Our goal is to maintain an average holding period of 2 years, but this depends on each stock’s performance. If a stock performs well, we hold onto it; if not, we exit.
  • While past returns do not guarantee future results, we aim to consistently generate ALPHA by investing in turnaround businesses through Turtle’s quant-based investing process.
  • No, PMS companies are not allowed to offer guaranteed return products in equities.
  • Yes, we accept both cheque or stocks, but the value must be a minimum of ₹50 lakh.
  • There are two types of costs:
    1. Fixed Costs: These include SEBI fees, brokerage, and audit expenses, which are among the lowest in the industry at 0.15% per annum of the portfolio over 3 years.
    2. Management Fees:
      • Below ₹1 crore: 2% (fixed)
      • Above ₹1 crore: 1% (fixed) + 10% profit sharing at the end of the contract (EOC).
      • Note: Fixed fees are adjusted against profit sharing at the end of the contract or any redemption.
      • Fees are exclusive of 18% GST.
  • Yes,we have separate services called Portfolio Review Services (PRS) where you just need to provide us with your current holdings. After a thorough review, we will tell you which stocks you should HOLD, EXIT, ADD, or

Know more – link to be – https://turtlewealth.in/service/portfolio-review-services/

  • Our auditor is SecMark Consultancy Ltd.
  • The tax liability under the PMS is similar to that of an individual investor trading directly in the capital markets. Each transaction within the PMS is treated as an independent trade, and capital gains taxes are applied based on the holding period of each stock.
  • Currently, the long-term capital gains tax is 12.5%, and the short-term capital gains tax is 20%.
Disclaimer:

Turtle Wealth’s PMS strategies are SEBI-registered and fully compliant with SEBI regulations. Investments in the securities market carry inherent risks, and there is no guarantee of achieving investment objectives or returns. Past performance is not indicative of future results. Investors should carefully assess their financial situation, risk tolerance, and seek independent advice before making any investment decisions.

Quant Process FAQS