Name: FG-HUM [First Global Human + Machine Model]
Brand: smallcase
SKU: FIGOMO_0001
Price: 194443 INR

First Global is the most trusted asset manager in India and globally with over 3 decades of experience and expertise in the investing business.

At First Global, we deliver top-of-the-line investment performance, using our proprietary, game-changing FG ExoTech, the most advanced Artificial Intelligence & Machine Learning investment engine in the world, using a unique combinatorial Human + Machine approach.

The First Global is globally regulated by SEBI in India, SEC in the US, FCA in the UK, and CIMA in the Cayman Islands.

Please find the disclaimers for FG-HUM: shorturl.at/jBKMP

Nifty 500 Index

FG-HUM [First Global Human + Machine Model]

First Global

Portfolio of 25-30 stocks, based on FG’s Human + Machine Model, to simplify your equity investing.

All companies listed on the National Stock Exchange of India, with a market capitalization greater than Rs 1000 crore, are included in the universe. All holdings are highly liquid. Each security must pass extremely rigorous liquidity criteria before being eligible for inclusion in the portfolio.

Following are the salient features of the process underlying the portfolio constriction: (a) At First Global, decision making is based on a combination of Human + Machine, rather than a Human-only model which changes as per the whims of a few people. Humans are unable to process the vast deluge of data that a machine can. A machine can evaluate thousands of companies, on hundreds of different factors, which is impossible for humans. Human beings are driven intrinsically by emotions, and not facts or data. This means that their decisions suffer from several classic, well-documented biases and are inconsistent. (b)&nbsp;The fund management team at First Global has decades of experience in navigating all kinds of market situations across the world and in India.&nbsp;&nbsp;&nbsp;It is the expertise of this team that has been coded into the model and is then applied consistently across securities. The quality of inputs, analysis, and factors that have gone into the FG model&nbsp;is of a completely different level, as compared to merely "quants" building these or trading algos. (c)&nbsp;The risk management systems are extremely advanced and focus on First Global’s number one mantra of investment management, i.e., do not lose big money. First Global has an obsessive focus on risk management and risk controls are embedded within every single step of the entire investing cycle.

All systems that constitute the decision-making process have been back-tested over multiple decades of data. We rely on a state-of-the-art advanced technology stack, that consists over several million lines of code, developed in-house over the years. Out back-testing processes are highly evolved and best practices are followed to ensure that the results are robust and replicable in the real-world. The comprehensive research infrastructure ensures rigorous coverage of every aspect of the investment process, including Strategy Prototyping, Event-driven Back-tests, Sensitivity Analysis, Walk Forward Optimization, Factor Engineering, Portfolio Construction, Stress Testing, etc. Over the period Jun-2005 to Sep-2021, as per backtested data, FG-HUM has returned 31.00% per annum, compared to Nifty 500’s 15.18% per annum and Nifty 50’s 15.40% per annum. An amount of Rs. 1 lac invested in FG-HUM at the beginning of the period would have become Rs. 82.28 lac at the end of the period as against Rs. 10.05 lac for Nifty 500 and Rs. 10.37 lac for Nifty 50. What is even better is that the Risk-adjusted return (CAGR/Volatility) for FG-HUM over this period is 1.40, compared to 0.64 for Nifty 500 and 0.69 for Nifty 50. The Gain to Pain ratio for FG-HUM is 1.72 compared to 0.79 for Nifty 500 and 0.83 for Nifty 50

As mentioned above, we do not consider stocks with a market cap below Rs 1000 crores. Even among them, we try not to have a high weightage for stocks below Rs. 5000 crores market cap as risks are higher in small caps. Portfolio selection is based on First Global’s proprietary Human + Machine Model, the ExoTech. The investment strategy is data and situation-based, that relies on the fact that flexibility is key to managing portfolios well, as no strategy works for ever. It is a blended investment strategy which is designed taking into consideration multiple factors like Value, Growth, Price Movement, Valuation, Quality of Stock, Overall Market Dynamics, etc. Essentially, it is a bias-free approach to investing. The Human + Machine Model is purely clinical. It doesn't storify investing. Risk control and not just return maximization, is key to these choices. Hence there is sufficient diversification across stocks and sectors.

We start with a roughly equal-weighted portfolio and thereafter make changes to these based on the following factors. Overall fundamental performance of the stock is considered, which includes hundreds of well-researched factors. Aspects like market capitalization and average daily traded values are evaluated. The volatility of the stocks is considered to ensure that a few volatile stocks don’t end up dominating the overall portfolio performance. Diversification across industries and sectors is ensured. The portfolio does not rely on the traditional method of measuring sectoral risk where each stock is exclusively categorized into a particular sector or industry. Stocks can have non-zero sensitivities to multiple sectors. Unsupervised clustering algorithms identify such sensitivities and give us a truer picture of actual sectoral allocation.

This smallcase has a quarterly rebalance schedule. Once every quarter, the research team reviews this smallcase and realign the weights with the selected asset allocation strategy for the next quarter.

The final screened stocks are then weighted according to the selected asset allocation algorithm

FG-HUM [First Global Human + Machine Model]

FG-HUM [First Global Human + Machine Model]

Overview

Stocks & ETFs