Prowealth Multi Opportunity Scheme

Pro-wealth Multi Opportunity Scheme’s objective is to outperform Nifty Index by preserving capital when the index falls and significantly participating in the upside of the Index. This is performed in two legs. The first leg strives to provide capital protection. The second leg strives to participate in the upside of the index. The Scheme aims to protect capital and generate returns that beat the NIFTY Index over a cycle that spans multiple ups and downs in the market index.

The equity, commodity and F&O (Futures and Options) markets offer opportunities to take advantage of statistical inefficiencies. The inefficiencies lie in pricing of index options and its corresponding futures contracts and also in pricing of stocks and stock futures contracts. In the absence of such arbitrage opportunities and at the discretion of the Investment Manager, alternatively, investment in debt (in the form of single securities or debt funds) may be made.  

This leg uses the potential gains from the first leg to invest in a series of call and put options at various times at various strike prices and maturities to participate in the upside of the Index. These may be invested long or short, leveraged or unleveraged or not invested at all based on the Investment Manager’s discretion. 

 The outperformance is expected to happen after a down and an up cycle, in the market index, are complete. The investment strategy works in cycles of one to two years. During down cycles, the first leg of the strategy seeks to preserve capital. During up cycles, the second leg of the strategy seeks upside participation. Hence, after completion of both a down and then an up cycle, the strategy is expected to outperform the Index.

Subject to the Regulations, the Scheme will undertake leverage by taking positions in futures and options and the leverage offers its own risk of margin calls. This risk is mitigated by taking offsetting positions. 

In the simplest case about 80% to 95% of the portfolio will be invested in debt or equity arbitrage or equity options to equity index arbitrage or commodity arbitrage related securities or physical assets and 5% to 20% in futures and options related securities. Depending on the pricing of the securities in the market, the portfolio mix is likely to change significantly. The Scheme can invest both long and short at the discretion of the Investment Manager. An arbitrage position generally requires a long and short positions. 

Prowealth Multi Opportunity Scheme is a SEBI registered Category III Alternative Investment Fund incorporated in the form of a trust. It is a privately pooled investment vehicle with a defined investment policy and is supervised by independent trustees and managed by WSIM Fund Advisors LLP. Stock Holding Corporation of India Limited is the independent custodian 

The Lock-in Period for the Investors is two years and thereafter, the Investors are allowed to redeem their investment in the Scheme. However, Investors may be allowed for early redemption. 

Investors are allowed to redeem at the end of any quarter (March 31st, June 30th, September 30th and December 31st) after the end of the Lock-in Period. Redemption can be only in multiples of Rupees five crores (initial investment value). Exceptions can be made only if liquidity permits and at the discretion of the Investment Manager. 

Early redemptions are only allowed at the discretion of the Investment Manager and such redemption will take place at the NAV on such Redemption Day. Capital protection guarantee shall not apply for Units redeemed within the Lock-in period. 

Request for redemption has to be made at least 15 days before end of quarter else redemption will be made only end of the subsequent quarter. 

Early redemption can be requested at any time but the actual redemption and receipt of proceeds may take between four to ten Business Days to process