Welcome to the Wright 2024 Wrapped! As we close out another remarkable year, we're thrilled to reflect on the highlights, achievements, and milestones that have defined our journey.

2024 was a dynamic and challenging year, beginning with a robust bull market in India, followed by a period of corrections towards the end. Despite this, we closed the year with an outstanding YTM performance. Significant sector rotation required us to make tactical portfolio adjustments, leading to substantial outperformance and invaluable lessons that will guide our future strategies.

For Wright, 2024 was a year of growth, evolution, and relentless quantitative innovation. These advancements have not only bolstered our portfolios but also positioned us to navigate the tough markets ahead with confidence and agility.

We extend our heartfelt gratitude to our clients, partners, and team members for your unwavering support and trust. Your collaboration and feedback have been pivotal to our success this year, and we look forward to building on this momentum together in 2025.

The Big Picture: Year in Numbers

2024 has been an extraordinary year for Wright Research, defined by strong performance across all strategies and substantial growth in assets under management (AUM).

Here's a detailed breakdown of our PMS and Smallcase performance.

PMS Strategies

• Wright Factor Fund: 37.06% (vs. BSE 500 TRI’s 14.66%)

• Outperformed the benchmark by over 22%, showcasing the power of our multi factor data-driven investment strategy.

• Wright Factor Hedged: 34.28%

• This strategy had lagged the other two in the last year but it ended this year with strong returns.

• Wright Alpha Fund: 25.42%

• Alpha saw some amazing months of outperformance and Top Rankings but had a few volatile months as well.

Smallcase Strategies:

• New India: 43.24%

• Reflected the growth story of emerging sectors in India, our best-performing strategy this year.

• Smallcaps: 40.83%

• Benefited from the resurgence in small-cap stocks, delivering exceptional returns.

• Alpha: 38.14%

• A top performer, highlighting our expertise in leveraging growth opportunities.

• HNI Quant Plus: 33.93%

• Catered to sophisticated investors with high-quality quant-driven insights.

• Momentum: 33.77%

• Captured trends effectively, ensuring consistent outperformance.

AUM Growth

Starting 2024 with our PMS AUM of ₹60 Cr, we concluded the year with a milestone achievement of managing ₹400 Cr in assets—an over 6x growth that underscores our growing presence and trust in the investment community.

This remarkable growth reflects our ability to scale effectively while maintaining superior portfolio performance.

Top Performing Strategies: A Closer Look

The Wright Factor Fund stood out as a flagship performer in 2024, showcasing the efficacy of advanced multi-factor strategies in achieving exceptional results. This fund combines fundamental, technical, and sentiment-based signals, striking an optimal balance between alpha generation and diversified risk management.

The strategy achieved its best performance in January, followed closely by June and April. Despite some volatility towards the year’s end, the fund maintained its strong outperformance against the benchmark, demonstrating resilience and adaptability without shifting to defensive cash positions.

Wright Alpha Fund The Alpha Fund had some amazing stocks that it selected which turned multi-baggers and had an agile response to market conditions. The fund made a great comeback from August to October but saw some volatility in November and December.

Smallcases: Tailored Strategies for Dynamic Markets

New India This smallcase embodies the growth and potential of emerging sectors in India, achieving a stellar 43.24% return. Key drivers include exposure to infrastructure, technology, and domestic consumption themes, positioning investors for long-term gains.

Smallcaps With a return of 40.83%, this smallcase focused on capturing the upside of high-growth small-cap stocks. By targeting businesses with robust fundamentals and growth potential, this strategy delivered exceptional performance.

Alpha Prime Alpha Prime continued to outperform with a balanced approach that combines growth and value principles. The strategy’s meticulous portfolio construction ensures a high conviction portfolio aimed at delivering sustainable returns.

Our Top Performing Stocks

Across our portfolios, specific stocks stood out as key contributors to our success in 2024. Here are some highlights:

Factor Fund

The strategy picked many winners with one multibagger and more than 20 stocks clocking north of 30% returns for the year. The top stocks in this strategy came from a diverse set of sectors - electronic manufacturing, infrastructure, capital markets and fintech.

• DIXON: Capitalized on its leadership in the manufacturing sector.

• MRPL: Benefited from strategic operational efficiency.

• PAYTM: Showcased significant growth in fintech adoption.

Alpha Fund

Alpha fund had a strong focus on infrastructure stocks in the start that led to some volatility but the best performers in this strategy were consumer durable and retail stocks like PGEL & TRENT.

• PGEL: Gained from structural demand in the electronics sector.

• TRENT: Continued to thrive in retail and consumer spending trends.

• JUBLPHARMA: Leveraged opportunities in the healthcare and pharmaceuticals space.

Momentum Fund

The Momentum fund found momentum in real estate, infrastructure, ecommerce, consumer durables and finance stocks.

• ANANTRAJ: Benefited from positive sectoral momentum.

• GVT&D: Outperformed through robust growth strategies.

• PGEL: Delivered consistent returns across multiple strategies.

Allocation Breakdown

2024 was a year of pivoting sectoral and factor allocations to capitalize on market shifts. As markets evolved, our portfolios underwent significant adjustments:

Sector Allocation

We began the year with a significant allocation to PSU banks and infrastructure financing companies. However, as market conditions evolved, we deftly pivoted toward higher exposure in sectors such as electronic manufacturing, financial services—particularly capital markets—and pharmaceuticals. Consumer-focused sectors also saw increased allocation, driven by a resurgence in discretionary spending. Conversely, we strategically reduced investments in traditional energy and cyclical industries to mitigate risks arising from macroeconomic uncertainties.

Factor Allocation

Our quantitative models were fine-tuned to respond to shifting market dynamics. There was a higher tilt towards momentum and quality factors during the latter half of the year, as these provided resilience amidst volatility. Value factors were strategically integrated in sectors showing structural tailwinds, while growth factors maintained consistent representation in portfolios positioned for long-term gains.

Sectoral Insights & Market Trends

2024 brought unique challenges and opportunities:

• Consumption and Healthcare: These sectors remained resilient, supported by robust domestic demand and increased health awareness.

• AI and Digital Transformation: Significant investments in transformative technologies reshaped industries and created new avenues for growth.

• Capex-Driven Growth: Infrastructure and manufacturing were highly volatile but are seeing uptick with hope of a renewed focus on capital expenditure.

Lessons Learned & Outlook for 2025

2024 was a year of resilience amid global challenges. Central bank policies, geopolitical shifts, and domestic activity shaped markets, and 2025 begins with cautious optimism. The first half may see muted growth due to tight liquidity and high borrowing costs, but the latter half promises recovery, driven by softer inflation, potential rate cuts, and improved global trade.

Global concerns like inflation, high debt, and geopolitical tensions persist. The strengthening U.S. dollar pressures emerging market currencies, but exporters in IT and pharmaceuticals stand to benefit. Domestically, accelerated capex spending and structural reforms could fuel growth in infrastructure, manufacturing, and renewable energy.

Sectoral Outlook for 2025

Several sectors are poised to perform well in 2025, offering diverse opportunities for investors. Below is an overview of the top-performing sectors:

1. Consumption

India’s consumption story remains robust, fueled by a young population, rising incomes, and urbanization. Consumer durables, FMCG, and discretionary products are likely to benefit from improving sentiment and festive demand in the latter half of the year. E-commerce platforms and retail chains may see sustained growth as digital adoption deepens.

2. Healthcare

The healthcare sector has consistently delivered strong results, supported by rising health awareness and government initiatives. Companies in pharmaceuticals, diagnostics, and medical devices stand to benefit from increased spending and export demand. Additionally, India’s position as a leading supplier of generics bolsters long-term growth prospects.

3. Banking & Financials

Banking and financial services will remain vital to economic growth in 2025. Robust credit growth, improving asset quality, and greater financial inclusion will support profitability in this sector. Innovations in digital payments and fintech continue to reshape financial services, presenting exciting opportunities for technology-driven players.

4. Information Technology (IT)

The IT sector’s adaptability to global trends ensures its resilience. As businesses prioritize digital transformation, Indian IT firms are poised to benefit from demand for cloud computing, cybersecurity, and data analytics services. The sector’s role in enabling AI-driven solutions further strengthens its growth potential.

5. Capex-linked Sectors

If capex spending accelerates, infrastructure, manufacturing, and industrials will benefit significantly. Companies involved in construction, cement, and heavy machinery are well-positioned to capitalize on increased investment flows into large-scale projects. Monitoring policy updates and project execution timelines will be crucial for investors.

AI remains transformative, unlocking efficiencies across industries and creating new opportunities. For investors, diversification, focus on quality, and thematic strategies like renewable energy and digital transformation are critical. With a disciplined approach, 2025 offers potential for growth amid challenges.

Resilience and Risk Management

In 2024, navigating a volatile market landscape required robust risk management strategies:

• Diversification: Maintained a balanced portfolio across sectors and asset classes to mitigate risks.

• Hedging Strategies: Leveraged options and futures to safeguard against market downturns.

• Tactical Cash Calls: Maintained liquidity during uncertain times to capitalize on emerging opportunities.

Key Milestones Achieved

2024 has been a transformative year for Wright Research:

• Enhanced Quantitative Models: Introduced cutting-edge frameworks in risk management, fear-greed indicators, sentiment analysis, and regime models. Expanded our universe with 200+ new factors for more robust decision-making.

• Operational Excellence: Improved execution capabilities by onboarding experienced dealers, accelerating account opening processes, and launching an advanced client dashboard for seamless interaction.

• Collaborations and Partnerships: Strengthened partnerships with industry leaders such as Nuvama, PMS AIF World, Credence FO, and more, broadening our reach and influence in the investment ecosystem.

• Client-Centric Innovations: Launched a WhatsApp community for real-time updates, added relationship managers for personalized service, and streamlined onboarding for NRI clients.

Community and Engagement

Our engagement initiatives in 2024 fostered deeper connections with our clients and the broader investment community:

• Hosted monthly live PMS webinars, exclusive client-only quarterly sessions, and three in-person meetups to address client queries and share insights.

• Expanded our client base by adding over 500 new users in PMS and growing smallcase base to close to 25k active users, underscoring the growing trust in Wright Research.

Fun Facts & Team Trivia

• We started the year with 300 factors in our factor library but closed it with more than 500 factors, also expanding our universe set and adding news and sentiment based factors.

• Quant strategies get a bad reputation with people assuming we have very high churn but we are closing the year with more than 6 stocks out of 23 stocks in our factor strategies which will be held for more than 1 year. We will lock in 30% of the portfolio profit in these long term holdings.

• Team dynamics: Our team worked extremely hard behind the scenes with average leaves per team mate less than a week for the year and folks putting in hours on Saturdays as well. We expanded to grow up to close to 20 people working with us right now, from around 10 at the beginning of the year.

Closing Note

2024 has been a year of remarkable growth and invaluable lessons for Wright Research. From navigating challenging market dynamics to achieving exceptional performance and setting new benchmarks, this year has been transformative. As we enter 2025, we carry forward our commitment to delivering excellence and innovation to our clients.

The outlook for 2025, while filled with challenges, also brings numerous opportunities. With a cautious yet optimistic approach, we aim to navigate the evolving global landscape with resilience and foresight. Our focus will remain on building robust portfolios, leveraging emerging trends like AI, and supporting transformative sectors such as healthcare, consumption, and IT.

We extend our heartfelt gratitude to our clients, team, and partners for their unwavering trust and support throughout this journey. Your feedback and collaboration inspire us to continuously innovate and strive for greater heights.

Let’s step into 2025 with confidence and shared determination to achieve new milestones. We invite you to join us in celebrating the successes of 2024 and embarking on the promising opportunities that lie ahead.

Here’s to a year of prosperity, growth, and success!

The Wright Research Team