Our Philosophy
Our Philosophy
The core of our investment philosophy is to focus on delivering consistent risk adjusted returns. We aim to provide research driven, validated and back-tested investment options that are designed to meet investment needs across all stages of life.
Investment Approach: Terminal Value Investing
At TRUST AMC, we believe that for high-growth stocks, a dominant part of value creation happens beyond the obvious forecast periods. In reality most analysis estimates a value for a company over a finite period for which they can accurately assess cash flows and assess the future. But it often becomes the de facto approach that stops at just that. We endeavor to go beyond to employ a more evolved approach to estimate the remaining value, which is the terminal value. Our philosophy will significantly focus on following parameters for stock selection in schemes’ portfolio:
1.
Differentiated Insights
2.
Terminal Value Investing
3.
Spotting Potential Gorilla Companies*
4.
Megatrends
5.
Intangibles
1.
Differentiated Insights
In high-growth stocks, investors frequently miss a large part of long-term value creation by focusing on the short-term forecast period (typically 3 to 10 years). We use our Differentiated Insights to project the long-term growth opportunity. For savvy and patient investors, this is where the maximum wealth-creation opportunity lies.
2.
Terminal Value Investing
For high-growth stocks, a dominant part of value creation happens beyond the short-term. The impact of compounding, the “hockey-stick” or “exponential growth” kicks in over the longer-term and creates immense value - this value is the Terminal Value (TV) i.e. the value beyond the foreseeable horizon. Terminal Value is the Magic at the intersection of Intangibles, Leadership and Megatrends.
3.
Spotting Potential Gorilla Companies*
We attempt to find Gorillas or outsized dominant leaders in their industries through our approach of Terminal Value Investing.
*Our pursuit would be to spot companies which are rare, dominant, unchallenged and long-lasting i.e like Gorillas
4.
Megatrends
Megatrends are major macro-economic, geopolitical, structural, or environmental trends. These are Structural shifts, Longer term in nature and have irreversible consequences. Megatrends transcend geographies, generations and have multiple dimensions, layers and outsized implications that are difficult to fathom at the very beginning.
5.
Intangibles
For long, we were witness to successful companies with physical assets such land, machinery, people or just access to natural resources. That is now changing to a world that is increasingly populated by fast growing companies which have no physical assets but a rise in intangible and less visible assets-like Intellectual property, Human capital, Technology, software.
Please note that this is the current investment approach for select schemes of Mutual Fund.
The outlook and the approach may change from time to time and portfolio of the scheme will be in line with Scheme Information Document of the scheme.