At IDFC AMC, we understand that sophisticated investors would like to uniquely customise their investments to meet specific investment objectives. To meet this objective, IDFC AMC has a Portfolio Management Services (PMS) platform that allows greater flexibility and higher customisation.

As part of our PMS offering, IDFC AMC launched in July 2017, a pioneering initiative in bringing Artificial Intelligence and Machine Learning techniques in equity fund management.

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IDFC Neo Equity Portfolio

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An Artificial Intelligence powered portfolio seeking steady outperformance with low volatility.

ABOUT IDFC NEO EQUITY PORTFOLIO

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IDFC AMC introduced a pioneering and unique PMS powered by Artificial Intelligence (AI), bringing AI techniques in equity fund management to Indian investors. The PMS is a focused portfolio of large and mid-capitalised stocks from the S&P BSE 200 index stock universe combining Machine Learning (ML) based investment process with Portfolio Manager expertise.

Under the supervision of an experienced Data Scientist, the ML driven product has the potential to identify opportunities to generate additional alpha while minimising risk / volatility of returns.

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What it is

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Artificial Intelligence based Portfolio seeking steady outperformance with low volatility.

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Builds a cohesive team of stocks rather than looking for individual superstars.

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Scientific data-driven decision making without preconceived biases.

What it is not

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Quant / Algo Trading Portfolio based on pre-fixed statistical rules.

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Portfolio aiming to discover unknown stocks and mid/small/micro-cap multi-baggers.

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Traditional way of investing relying on human expertise (Fund Manager) to analyse stocks.

Neo Investment Framework - SCORE

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Sourcing

Sourcing, screening and analysing
multiple datasets to identify factors
that influence returns of a stock.

Cleaning

Clean and curate data for
analysis to meet investment
requirements of generating
potential sources of alpha.

Optimum Portfolio

Optimum Portfolio identified to
be included in the portfolio.

Risk Management

Ongoing risk management
of the portfolio to maintain
desired risk-reward balance.

Evolution

Machine learning process
continuously learns and
keeps evolving to improve
its portfolio management
ability.

Neo Investment Process

step 1

The Portfolio Manager may
introduce filters and eliminate
stocks from the S&P BSE 200
universe basis prevailing
market conditions.

step 2

The machine identifies
the right mix of attributes
in stocks. Then selects the
optimal one with the best
risk-reward balance

step 3

Best stocks (as per the machine
output) are algorithmically
assigned weights

How a Machine Learning powered portfolio works

Role of the Portfolio Manager

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The Portfolio Manager receives unstructured or semi-structured data and seeks to identify sources of relevant data which can generate alpha signals.

They then program the Machine Learning techniques which will allow the machine to analyse the input data.

A risk framework is defined by the Portfolio Manager within which the machine builds its own models to predict outcomes.

Role of the Machine

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The machine can sift through vast quantities of data fed by the Portfolio Manager and identify historical patterns and complex relationships that are not obvious to the human eye.

The machine adapts as data changes and learns, while the Portfolio Manager intervenes only in exceptional circumstances.

About the Portfolio Manager

Dr. Chetan Mehra - IDFC Fund Manager

Dr. Chetan Mehra

Head – Quantitative Investments

Dr. Mehra is a data scientist with about two decades of experience in quantitative analysis and in building trading models.


He holds a Ph. D. in Computer Science, Multi-agent Systems in Computational Finance from the University of Southampton and an MBA in Finance from the University of Leeds.

His Ph.D. focused on a data science approach to capturing structure in data to build smart portfolios.

He has managed global futures, equity and multi asset portfolios, as well as had trading experience in all four asset classes, for listed and OTC instruments in all liquid markets.

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Portfolio update with Fund
Manager Commentary

March 2020 portfolio update document

Fund Performance

IDFC Neo Equity Portfolio vs Benchmark (S&P BSE 200)

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IDFC Neo Equity Portfolio


S&P BSE 200

Performance as on 31st March 2021. The performance disclosure provided herein is not verified by SEBI.
The performance is based on Time Weighted Rate of Return considering all cash holdings and investments in liquid fund net of all fees and expenses (including taxes) at scheme level. Returns presented as absolute returns for < 1 year period and CAGR for> 1 year period. Investor level return may differ based on the time of entry, fees structure etc. Past performance may or may not sustain in the future. There is no assurance or guarantee of returns or performance and actual returns would depend on market conditions. Portfolio manager’s decision may not always be profitable or prove to be correct. The Portfolio Manager or any of their officers, directors, employees, service providers, agents or representatives will not be liable or responsible in any manner whatsoever if the targeted returns are not achieved.

Still got questions? We have the answers.

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What is Portfolio Management Services (PMS)?

A Portfolio Management Service contains an investment portfolio across asset classes, serviced by a professional money manager, that can be tailored to meet specific investment objectives of investors.

Discretionary

Under these services, the choice as well as the timing of investment decisions rest solely with the Portfolio Manager. The Portfolio Manager may at times and at its own discretion, adhere to the views of the client pertaining to the investment / disinvestment decisions of the portfolio.

Non-Discretionary

Under these services, the Client directs the Portfolio Manager in making the desired investment transactions and the Portfolio Manager manages and executes transactions based on Clients directions.

Investment Advisory

Under these services, the Portfolio Manager advises Clients on investments in general and any specific advice required by the Clients and agreed upon in the PMS Agreement. For such services, the Portfolio Manager charges the Client a fee for services rendered as spelt out in the PMS Agreement. The advice may be either general or specific in nature and may pertain to a particular portfolio.

What is the difference between a PMS and a Mutual Fund (MF)?

A MF is an investment vehicle which pools assets from investors with a common investment objective and invests those in securities, which complement that objective. The risks & rewards are proportionately shared by all the investors in the MF.

A PMS, on the other hand, can be customised to suit a client’s investment mandate. The risks & rewards from the portfolio are borne solely by the investor for whom the portfolio is being managed.

A PMS, which has greater flexibility and higher customisation vs a MF, is usually offered as an investment solution to high net worth investors. In a PMS, securities are held in the investor’s demat account unlike in a MF where assets across all investors are pooled in a single account.

In a MF, subscriptions / redemptions by one investor may impact the net asset value of the entire fund. In a PMS, since each investor portfolio is held in a different account, subscriptions / redemptions in one account do not affect portfolios of other investors.

An investor can begin investing through a PMS with a minimum ticket size of ₹50 lakh whereas a MF investment can be started with ₹500 (depending on the type of fund).

Will subscriptions be accepted in cheque / RTGS only or also in the form of securities?

Subscriptions can be accepted either in cheque / RTGS or also in the form of securities. However, the manager reserves the right to determine whether the securities provided by the potential investor are acceptable or not. Typically, if the securities provided are liquid and not in violation of any grey lists, then they will be accepted.

What is the tax treatment in PMS investment?

The tax liability of a PMS investor would remain the same as if the investor is accessing the capital market directly. However, the investor should consult his tax advisor for the same. The investor will be provided with an audited statement of accounts at the end of the financial year to aid the investor in assessing his/ her tax liabilities.

For NRIs as per applicable laws, TDS needs to be deducted post every profit booking while losses will have to be claimed in the year-end tax returns filing.

How can I invest in IDFC Neo Equity Portfolio?

The minimum investment amount is ₹50 lakh. Subscriptions are accepted on a daily basis.

An investor can connect with their financial advisor or write to investor.services@idfc.com or call at +91-22-43422799 for details on opening a PMS account with IDFC AMC.

Pursuant to SEBI Circular No. SEBI/HO/IMD/DF1/CIR/P/2020/26 dated February 13, 2020, Clients have an option to enter into PMS agreement with the Portfolio Manager directly from July 01, 2020, without intermediation of persons engaged in distribution services. At the time of on-boarding of Clients directly, no charges except statutory charges will be levied.

Downloads/Forms

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Disclosure Document

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Financial Transaction Form

Additional Purchase Form and Redemption Form

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Non-Financial Transaction Form

Client Mandate Change Form

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Non-Resident Indian (NRI) investors, can request the onboarding forms via:

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Pursuant to SEBI Circular No. SEBI/HO/IMD/DF1/CIR/P/2020/26 dated February 13, 2020, Clients have an option to enter into PMS agreement with the Portfolio Manager directly from October 01, 2020, without intermediation of persons engaged in distribution services. At the time of on-boarding of Clients directly, no charges except statutory charges will be levied.

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