360 ONE Multicap PMS: 8X returns in 10.5 years

If you had invested Rs 50 lakhs in 360 ONE Multicap PMS at its inception around 10 years back, the value of your investment would have multiplied to around Rs 4.2 crores (as on 28^th March 2024). The scheme invests in a diversified portfolio of stocks across all three market cap segments i.e. large cap, midcap and small cap. The scheme has a great wealth creation track record (see the chart below).

Source: 360 ONE, Advisorkhoj Research, as on 28^th March 2024

Why invest in 360 ONE Multicap PMS now?

• GDP growth outlook: IMF is forecasting India to be the fastest growing G-20 economy in 2024. They recently updated their GDP growth forecast to 6.8% from 6.5% for FY 2024-25. If the IMF projections given in its World Economic Outlook database for April 2024 are right, India will overtake Japan to become the fourth largest economy in the world by 2025 and overtake Germany to become the third largest by 2027.


• Consumer lending opportunity: Currently only 10% of India’s population accounts for 70% of India’s USD 650 billion consumer lending market. There is huge scope of consumer lending growth as the sections in the lower income groups are brought under the ambit of retail credit.
  
  

  

  Source: 360 ONE AMC



• IT sector opportunity: Over the past 2 – 3 decades India has emerged as one of the leading software sourcing hubs of the world. India’s software exports accounts for 11% of global software market (source: Ministry of External Affairs, April 2023). The share of IT sector in the GDP climbed from 1.4% to 7.7%. The IT sector is expected to hire 1.35mn people in the next 2 years (more than the total hiring in the last 7 years). For every job that is created in the IT sector, four jobs arecreated in the rest of the economy (NASSCOM-Crisilreport).Commercial real estate benefits due to an IT boom as the ITsector covers close to 50% of the annual commercial realestate supply. The knock on effects of IT sector growth in India will be very beneficial for Indian economy and corporate sector (source: 360 ONE)


• Growth in private sector capex: The production linked incentive scheme (PLI) of the Government is incentivizing private sector capex spending (Rs 4.4 Trillion of committed or likely capex investments), which can lead to significant revenue and earnings growth in the coming years.
  
  

  

  Source: 360 ONE AMC



• Valuations are reasonable: Though valuations have risen, they are still not in the expensive zone for long term investors. The Sensex Price to Book at 3.7X is within 1 standard deviation of the 23 year average P/B of 3.1. The market may be in the P/B range of 3 and 4 for a considerable period of time, and can give strong 5 years returns from the current valuation levels
  
  

  

  Source: Bloomberg, as on 31^st March 2024



• Fundamentals are on the improving trend: Corporate profits to GDP ratio has been improving from its low in 2020 (COVID-19) after a long period (more than 10 years) of decline. Historical data suggests that improving corporate profits to GDP ratio indicates long term secular bull market for Indian equities.
  
  

  

  Source: Motilal Oswal, corporate profits refers to earnings of Nifty 500 companies



• Compounding potential of Indian equities: In last 20 years, 98 stocks in BSE 500 gave more than 20% CAGR returns. In last 10 years, more than 20% of BSE 500 stocks gave more than 20% CAGR returns. The 20% CAGR hit rate of Indian stocks is much higher than developed markets like US, Japan etc and emerging markets like China.

Why Multicap strategy?

The strong rally in the market over past year or so has raised concerns about valuations in certain pockets. In late February SEBI issued an advisory on froth building in valuations of midcap and small cap stocks. Though the outlook for Indian equities is very bright in the long term, there may be some short term volatility due to global risk factors e.g. timing of interest rate cuts by the US Federal Reserve, geo-political risks in the Middle East and knock on effects on crude oil prices / inflation etc. During periods of higher volatility, large cap stocks have outperformed mid and small cap stocks. On the other hand, midcaps and small caps have higher growth and wealth creation potential compared to large caps. A multicap portfolio can balance risk and return, for long term wealth creation.

Source: Bloomberg. Data as on Mar 28^th, 2024; Periodic returns mentioned above are absolute returns

Performance of 360 ONE Multicap PMS

While the absolute return of 360 ONE Multicap PMS since inception was outstanding, you can see that 360 ONE Multicap PMS has beaten the BSE 500 TRI in most years and created alphas for investors.

Source: 360 ONE Multicap PMS. Data as on Dec 31, 2024; Periodic returns mentioned above are absolute returns

SCDV Investment framework of 360 ONE Multicap PMS

360 ONE Multicap PMS follows the highly successful proprietary SCDV investment framework of 360 ONE AMC.

Source: 360 ONE, as on 31^st March 2024.

Active asset allocation

The scheme actively manages allocations between market cap segments based on market outlook.

Source: 360 ONE, as on 31^st March 2024.

Current Portfolio Positioning

Source: 360 ONE, as on 31^st March 2024.

Source: 360 ONE, as on 31^st March 2024.

Our take

• Though interest rate cuts are imminent, there is uncertainty about the timing of rate cuts due to strong economic data in the US and continuing high inflation.


• India continues to be the bright spot among the emerging economies and is likely to see higher allocations from FIIs in the coming year.


• In the current market context and economic outlook for 2024, we expect stock selection to be significant driver in portfolio returns.


• 360 ONE Multicap PMS with its track record of alpha creation is strongly positioned to deliver alphas for investors in the medium to long term.

Consult with your financial advisor or PMS distributor if you want to know more about 360 ONE Multicap PMS