PGIM India Core Equity Portfolio

Spotting value early

Based on the objective of avoiding big mistakes, the PGIM India Core Equity Portfolio is designed to create wealth over the long term. PGIM India recognizes that sustainable wealth can be created in the stock market by (a) buying into businesses that enhance shareholder wealth by generating returns greater than their cost of capital, and (b) not overpaying for such businesses. This is in line with the objective outlined above, since most of the mistakes made in the stock market are either that of buying businesses with weak fundamentals or paying too much for the stocks purchased.

How does it work?

The investment strategy adopted by PGIM India Core Equity Portfolio is to buy stocks of companies that have demonstrated a track record of shareholder value creation, and buying them at a time when they are not quoted expensively in the market.

Stocks of good companies quote inexpensively only when the general market does not expect these companies to perform well in the short term. Therefore, PGIM India Core Equity Portfolio seeks to exploit this opportunity by buying into such companies when they face a temporary challenge or slowdown.

We take reasonable care to see that the long-term fundamentals and growth prospects for the company are not impaired by the short term challenges. We seek to find value in stocks quoting at a discount to their calculated intrinsic value, and/or in stocks quoting at a valuation that is significantly lower than their long-term average valuation

Isn’t this just another ‘value’ strategy?

Traditional “value” strategies equate value with cheap valuation. They focus on buying stocks that are underpriced at a particular point of time. PGIM India Core Equity Portfolio gives importance to quality of business and to the valuation while exploiting mispricing and profit opportunities. As such, it seeks to identify value regardless of whether the stock is classified as “value”or “growth” by traditional parameters.

Why invest in this strategy?

PGIM India Core Equity Portfolio provides a genuinely differentiated portfolio to the investor. The strategy seeks to buy stocks well before they become popular in the stock market. Since the time horizon for holding stocks by this strategy is well beyond one year, the investor does not lose out on the benefit of exemption of long term capital gains tax.

Who should invest?

PGIM India Core Equity Portfolio's approach seeks to provide advance indication of mispricing and is accompanied by the possibility that markets may take some time to catch up. As a result, gains from this strategy are expected to accrue only over a relatively extended period of time. As such, PGIM India Core Equity Portfolio is ideal for patient investors interested in long term wealth creation.

Strategy Snapshot

Benchmark Nifty 500
Target Capitalization Range No bias
Target Diversification 20-25 stocks
Max. Single Stock Exposure 10%
Max. Single Sector Exposure 30%
Min. Investment Horizon 3 years
Leverage No
In addition, we provide comparison with the Nifty 50 Index

PFI of the United States of America is not affiliated in any manner with Prudential plc, a company incorporated in the United Kingdom .


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