“LIC MF Factor Advantage PMS”, is a Discretionary Portfolio management strategy, designed to deliver risk weighted returns on a quality & concentrated portfolio. The strategy is a hybrid of active and passive stock selection process, making it a game changer product for investors.


Strategy Documents

Multi-stage portfolio creation:

As good quality stocks are market cap agnostic;universe include entire spectrum of large, mid and small cap (~top 400 stocks on NSE). The multi-stage filtering is applied on the eligible universe and

In stage 1: Stocks are short listed on risk weighted methodology:

Almost all portfolios are constructed on a bottom- up stock selection framework. It is a known wisdom that, if everyone adopts the same method of stock selection then alpha generation wanes out with more and more AuM tracking same methodology. Sporadic episodes like Covid-19 crash (2020), China Yuan Devaluation (2015), Taper tantrum (2013), European Debt Crisis (2011) and Lehman collapse (2008) has thought us that one needs to look beyond bottom up stock selection alone and focus also on the over portfolio risk management (as fund managers have a buy bias and these events are hard to predict). LIC MF Factor Advantage PMS atStage 1 filters stocks based on key factor of “risk weighted methodology” to ensure that the portfolio is from laundry list of stocks that have prima-facie shown competence to weather out 3sigma drawdowns much better than the peers and even the key Indices.

In Stage 2: Shortlisted stocks are analyzed based on Fundamentals, ESG and market conditions to decide final portfolio.

In this stage, filtering is based upon key evaluating fundamental attributes over a long period of time:
  • check-boxSales growth
  • check-boxCFO> PAT
  • check-boxRoCE/RoE> WACC

And include the ESG framework in the final portfolio. Resultant portfolio is equipped to weather volatile market better than conventional constructs as it is based on mix of passive (risk weighted methodology) and active (fundamentals & ESG).

This portfolio is rebalanced semi-annually there by “cutting the noise”. Importantly, due consideration is given to “time-in the market over timing the market”; so even on rebalancing events the churn ratio is kept much lower than other schemes, resulting in a greater terminal value for the portfolio. A Quality stock portfolio that is due patience, time and discipline yields returns. Minimizing the churn, aids this by limiting the broking cost, impact cost and short-term capital gain implications.

Key Highlights of the product

  • check-boxConcentrated portfolio of 18-25 stocks.
  • check-boxEligible Stock universe comprises of stocks from Large, Mid & Small cap segment.
  • check-boxStock selection strategy that is well diversified across sectors thereby reducing sudden shocks.
  • check-boxWith a threshold mechanism that lays down stringent criteria for inclusion and exclusion, the strategy seeks to minimize the degree of churning and thereby, trading costs.

Fee Structure

Investment Management   and Advisory fee**
Type Direct Plan Regular Plan
Management Fee (Option I) Fixed 2.25% 2.50%
Variable NA NA
Management Fee (Option II) Fixed 1.75% 2.00%
Variable The Performance Incentive will be 20% of the profits over and above the Minimum Hurdle Rate after all expenses on the Portfolio including the AMC. Hurdle rate for the purpose of calculation of performance fees is 10%. Performance fees shall be computed on the basis of a High Water Mark Principle over the life of the investment. The Portfolio Manager will not get Performance Fees if the Minimum Hurdle Rate is not achieved The Performance Incentive will be 20% of the profits over and above the Minimum Hurdle Rate after all expenses on the Portfolio including the AMC. Hurdle rate for the purpose of calculation of performance fees is 10%. Performance fees shall be computed on the basis of a High Water Mark Principle over the life of the investment. The Portfolio Manager will not get Performance Fees if the Minimum Hurdle Rate is not achieved
Exit Load 1 % in first 12 months of Investment.
Other Charges Capped at 0.50%

* Minimum investment: INR 50 lacs

Head PMS


Mr. Mahesh Bendre has over 18 years of experience in Indian Equity Market in Equity Research and Fund Management domain. In the past, Mahesh has worked with Edelweiss Capital, HSBC Securities, IDBI Capital Etc. He is a Mechanical Engineer and has completed his PhD in Finance from Pune University. He has expertise in Equity Research, Macro economic Research and Portfolio Management. He is heading PMS vertical at LIC AMC Ltd.

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General Disclaimer: All returns are in percentage. Performance disclosure is at aggregate portfolio level and the portfolio information (i.e. market cap, sector allocations, etc.) is at model client’s level. Securities investments are subject to market risks and there is no assurance or guarantee that the objective of the investments will be achieved. Past performance of the portfolio manager does not indicate its future performance. Performance related information provided herein is not verified by SEBI. Detailed Disclaimer: This document is issued by LIC MF Asset Management Ltd. (Portfolio Managers). This document is produced for information purposes only and not a complete disclosure of every material fact and terms and conditions. It does not constitute a prospectus or disclosure document or an offer or solicitation to buy any securities or other investment. All opinions, figures, charts/graphs, estimates and data included in this document is subject to change without notice. It should not be construed as investment advice to any party. The statements contained herein may include statements of future expectations and other forward-looking statements that are based on our current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Investors shall be fully responsible/ liable for any decision taken on the basis of this document. Clients under Portfolio Management Services are not being offered any guaranteed/assured returns. The name of the strategies do not in any manner indicate their prospects or return. The investments may not be suited to all categories of investors. The material is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. Neither LIC MF Asset Management Ltd. nor any person connected with it, accepts any liability, losses and/ or damages arising from the use of this material. The recipient of this material should rely on their investigations and take their own professional advice. Opinions, if any, expressed are our opinions as of the date of appearing on this material only. While we endeavor to update it on a reasonable basis, there may be regulatory, compliance, or other reasons that prevent us from doing so. The Portfolio Manager is not responsible for any loss or shortfall resulting from the operation of the strategy. The recipient shall understand that the statements cannot disclose all the risks and characteristics. The recipient is requested to take into consideration all the risk factors including their financial condition, suitability to risk-return, etc. As with any investment in securities, the value of the portfolio under management may fluctuate depending on the various factors and forces affecting the capital market. Disclosure Document shall be obtained and read carefully before executing the PMS agreement. For tax consequences, each investor is advised to consult his / her own professional tax advisor. This document is not for public distribution and has been furnished solely for information and must not be reproduced or redistributed to any other person. Persons into whose possession this document may come are required to observe these restrictions. Distribution Restrictions – This material should not be circulated in countries where restrictions exist on soliciting business from potential clients residing in such countries. Recipients of this material should inform themselves about and observe any such restrictions.