- About Us
- Investment Philosophy
Our Investment Philosophy
In-depth Study. Careful Evaluation. Stringent Selection.
As a part of our investment process, at ICICI Prudential Portfolio Management Services, we strive to develop a deep understanding of the companies in which we invest.
Our stock selection process across all our PMS Strategies is guided by a Core-4 investment framework. The Core 4 Framework is an integrated approach that covers the Quality of Business, Valuations, Sentiments and Themes. This core investment philosophy has not only helped to ride through turbulent markets in the past, but it has also helped to negotiate the recent market volatility as well.
In the first part of the investment framework, we aim to focus on companies with established business models, having low leverage and which are believed to be able to generate sustainable cash flows. An internal study of past market cycles have shown that companies with lower debt have been able to negotiate a crisis better and in some cases have been able to recover faster.
In line with our framework, valuations are equally important, because if one does not buy it at the right price, the entire analysis will likely to be futile. Market events both domestic and global, can easily spark a change in sentiments. Thus, one of the best times to invest is when the sentiments are considered to be unfavourable or seem to be at a turning point. Further, portfolios being overweight on dominant themes have the potential to capture a market upside. In the various phases of a market cycle, investment themes can either be dormant or dominant. Alpha is likely to be created by riding dominant themes.
The Core 4 framework/selection criteria mentioned above are only indicative. There may be other factors that may be relevant for identification/selection of stocks. Past performance may or may not be sustained in future.
P/E- Price/Earnings; PEG – Price-Earnings Growth ; P/B – Price/Book Value; EBITDA- Earnings Before Interest, Tax, Depreciation & Amortisation