Compounding is the Eighth wonder of the world

- Albert Einstein

#1
Volvin Limited
India’s 1st Fund (AIF) focused on covered call strategy

www.volvin.co All rights reserved and copy righted

1. Magic Number
2. What is long term?
3. Power of
compounding
 Returns annualised for different periods
Year NIFTY 1 2 3 4 5 6 7 8 9 10
Year Years Years Years Years Years Years Years Years Years
1990 331
1991 559 69%
1992 761 36% 52%
1993 1043 37% 37% 47%
1994 1182 13% 25% 28% 37%
1995 909 -23% -7% 6% 13% 22%
1996 899 -1% -13% -5% 4% 10% 18%
1997 1079 20% 9% -3% 1% 7% 12% 18%
1998 884 -18% -1% -1% -7% -3% 3% 7% 13%
1999 1480 67% 17% 18% 13% 5% 6% 10% 13% 18%
2000 1264 -15% 20% 5% 9% 7% 1% 3% 7% 9% 14%
2001 1059 -16% -15% 6% 0% 3% 3% -2% 0% 4% 7%

Nifty 2002
2003
2004
1094
1880
2081
3%
72%
11%
-7%
33%
38%
-10%
14%
25%
5%
6%
13%
0%
16%
7%
3%
10%
15%
3%
11%
10%
-1%
10%
11%
1%
5%
10%
4%
6%
6%
2005 2837 36% 23% 37% 28% 18% 11% 18% 13% 14% 12%

performance 2006
2007
2008
3966
6139
2959
40%
55%
-52%
38%
47%
-14%
28%
43%
1%
38%
34%
9%
30%
41%
9%
21%
34%
18%
15%
25%
16%
21%
19%
11%
16%
24%
8%
16%
19%
13%
2009 5201 76% -8% 9% 16% 20% 18% 25% 22% 17% 13%

over 1-10 2010

2011
2012
6135
4624
5905
18%
-25%
28%
44%
-6%
-2%
0%
16%
4%
12%
-7%
19%
17%
3%
-1%
20%
8%
7%
18%
12%
11%
24%
12%
14%
22%
17%
14%
17%
16%
18%
2013 6304 7% 17% 1% 5% 16% 0% 7% 10% 13% 13%

years 2014
2015
2016
8283
7946
8186
31%
-4%
3%
18%
12%
-1%
21%
10%
9%
8%
14%
9%
10%
5%
12%
19%
7%
5%
4%
15%
7%
10%
3%
14%
13%
8%
3%
15%
11%
8%
2017 10531 29% 15% 8% 14% 12% 15% 8% 9% 15% 6%
2018 10863 3% 15% 11% 7% 11% 11% 13% 7% 9% 14%
2019 12168 12% 7% 14% 11% 8% 12% 11% 13% 8% 9%
2020 13982 15% 13% 10% 14% 12% 9% 12% 11% 13% 9%
2021 17354 24% 19% 17% 13% 16% 14% 11% 13% 13% 14%
2022 18105 4% 14% 14% 14% 11% 14% 12% 10% 12% 12%
Equity Performance over 01-10
years
Chances of losing money in equity over
01-10 years
Nifty – Equity returns
are not linear

There are excesses on

both sides
What is Risk?

Financial risk refers to the

likelihood of losing
money on a business or
investment decision
How to reduce risk?

1. Invest for Long Term - 5 years+

2. Diversify Portfolio

3. Understand cycle of Market

Emotions
"Be fearful when others are
greedy.
Be greedy when others are
fearful"

Warren Buffet
"Most people are too fretful,
they worry too much.
Success means being very
patient, but aggressive when
it’s time"

Charlie Munger
 Euphoria

Thrill Anxiety

Excitement Denial

Fear

Optimism Optimism
Desperation

Relief
Panic

Cycle of Hope
Depression
Market Emotions Capitulation

Despondency
 Euphoria

Thrill Anxiety

Excitement Denial

Fear

Optimism Optimism
Desperation

Greed Zone

Relief
Panic

Buying Zone for Hope

Depression
a common investor Capitulation

Despondency
 Euphoria

Thrill Anxiety

Excitement Denial

Fear

Optimism Optimism
Desperation

Fear
Zone
Relief
Panic

Buying Zone Hope

Depression
for Smart Investor Capitulation
Small or Frugal Buying
Despondency
 Euphoria

Thrill Anxiety

Excitement Denial

Fear

Optimism Optimism
Desperation

Fear Zone
Relief
Panic

Buying Zone Hope

Depression
for Crazy Returns Capitulation
Large or Generous buying
Despondency
What is Wealth Creation?
Wealth creation is the
process of accumulation of
assets, investments, and
resources over a period of
time.
“The number in % by which business or investment
growth rate has beaten the inflation growth over a
long term is known as The Magic Number”

- Vineet Jainn
What is Magic Number?
Magic number is defined as a
number in % by which
business or investment
growth rate has beaten the
Inflation rate for that period.
2 Illustrations - examples

Wealth preserver

Wealth creator
Mr A, Wealth PRESERVER
Mr A, as he wishes to conserve
wealth, invests lot of money in low
risk FDs, Govt Bonds, Debt
Instruments generating 7-10% pre
tax returns
Mr B, Wealth CREATOR
Mr B, is smart, willing to take a
slightly more calculated risk and
he invests money in Govt Bonds,
Debt Instruments, long short funds
and mix of Equity products
 Returns of Mr. A, Mr. B
•Mr A, wealth preserver - all FDs
return of 8%

•Mr B, wealth creator - FDs and mix of equity

> return of 10%
So how to create
Crazy Wealth?
3 Magic Mantras to
create crazy wealth!
1. Understand Magic Number –
Inflation
2. Understand RISK – What is
Long Term, Diversify, Market
Emotions cycle
3. Power of Compounding
Power of Compounding

Amount Years Returns Final Amt Magic No

1cr 25 yrs. @ 8.0% 6.84 cr 1.0

1cr 25 yrs. @ 11.7% 15.89 cr 4.7
1cr 25 yrs. @ 15.0% 32.91 cr 7.0
1cr 25 yrs. @ 18.0% 62.66 cr 11.0
 Power of Compounding 8X

1. 5.6% compounded for 25 years

is 4.12 crores
2. 15.0% compounded for 25
years is 32.91 crores
What is Covered Call
or CC strategy?
BlackRock Energy and
Resources Trust
Fund size : $398.6M as of Dec 22
Launch Date: 23/12/2004
Making more by losing less
(BlackRock Energy and Resources Trust)
• BlackRock believes that investors may want to consider lower
volatility strategies such as those used by equity covered-call
closed-end funds, which can help to manage portfolio risk and
potentially produce a better risk adjusted outcome.
• BlackRock believes a covered call strategy may reduce volatility in
your portfolio
• BlackRock believes that by using an equity covered call strategy,
Investors can reduce portfolio volatility by capturing option
premiums, without having to sacrifice long-term performance.
• Implied volatility has been greater than realized volatility, creating
what is often referred to as the "volatility risk premium”.
 Concept of
Thrill seekers
Amusement Park- Riding the
Gambler places bets in the
Speculator buys call
 Roller Stock
Situation >> Casino
Coasters Markets
Thrill Seekers Riders Gamblers Speculators

Buys Call
Payment Made Buys a ticket Places Bets
Options

Volvin Growth
Profit made by Amusement Park The Casino
Fund

The speculators or option buyers pay a premium of

approx 2.5-5.0% per month. This 2.5% a month is
30% a year!
Types of Corrections

- Stock Price correction

or fall in price

- Time correction
Covered Call or CC
strategy is the only
strategy that creates
money/ alpha even in
stagnant or uncertain
markets
Uncertain Markets
 Example of a CC Portfolio for Rs 1 crore
(ATM) Price Of stock as on 30.10.2023

ATM

Script Price Strike Price Call Premium Potential Income % of Prem Lot Size Investment

128.40 22260 6.2 359520

DELTACORP 127.5 7.95 2800

160.80 47430 5.8 5041197

IBULHSGFIN 160 9.30 5100

11.60 48000 5.0 928000

IDEA 12 0.60 80000

2294.55 33795 4.9 688365

ADANIENT 2300 112.65 300

685.00 42055 4.8 890500

GNFC 680 32.35 1300

169.90 26520 4.6 577660

INDUSTOWER 170 7.80 3400

73.20 26000 4.5 585600

PNB 73 3.25 8000

223.15 24625 4.4 557875

RBLBANK 222.5 9.85 2500

209.95 26825 4.4 608855

INDIACEM 210 9.25 2900

120.70 27300 4.3 633675

BHEL 120 5.2 5250

324810 4.9 10871247

 Example of a CC Portfolio for Rs 1 crore
(OTM) Price Of stock as on 30.10.2023

OTM (5%)

Script Price Strike Price Premium Potential Income % of Prem Lot Size Investment

11.65 48000 5.0 932000

IDEA 12 0.60 80000

128.40 15960 4.2 359520

DELTACORP 132.5 5.70 2800

160.80 26265 3.0 820080

IBULHSGFIN 170 5.15 5100

2299.10 21060 2.9 689730

ADANIENT 2400 70.20 300

134.20 20100 2.4 805200

MANAPPURAM 140 3.35 6000

684.25 21190 2.3 889525

GNFC 720 16.30 1300

169.85 13600 2.2 577490

INDUSTOWER 180 4.00 3400

54.65 13500 2.1 614812.5

GMRINFRA 57 1.20 11250

222.95 12375 2.1 557375

RBLBANK 235 4.95 2500

73.15 12800 2.1 585200

PNB 77 1.6 8000

204850 2.8 6830932.5

 Maximum Potential Returns in
Price Of stock as on 30.10.2023

Script
OTM Price Strike Price
OTM (5%)

Premium Potential Income % of Prem Lot Size Investment Upside

IDEA 11.65 12 0.60 48000 5.0 80000 932000 28000

DELTACORP 128.40 132.5 5.70 15960 4.2 2800 359520 11480
IBULHSGFIN 160.80 170 5.15 26265 3.0 5100 820080 46920
ADANIENT 2299.10 2400 70.20 21060 2.9 300 689730 30270
134.20 20100 2.4 805200 34800
MANAPPURAM 140 3.35 6000
GNFC 684.25 720 16.30 21190 2.3 1300 889525 46475
INDUSTOWER 169.85 180 4.00 13600 2.2 3400 577490 34510
GMRINFRA 54.65 57 1.20 13500 2.1 11250 614812.5 26437.5
RBLBANK 222.95 235 4.95 12375 2.1 2500 557375 30125
PNB 73.15 77 1.6 12800 2.1 8000 585200 30800
319817.5
204850 2.8 6830932.5 3.1

2.8 + 3.1 = 5.9

Maximum Gain Possible 5.90%

Annualised 70.80%
What has Volvin Growth
Fund achieved?
Needs of Conventional
Fund Managers
vs
Investor Needs
 Breakup of Equity and Derivatives Segment
Volvin Growth
Fund Nifty 200 CAPM Beta
NAV Nifty 200 % CHANGE % CHANGE LONG % EQ DR (measure of risk)
28-Sep-22 100.00 9023.60
30-Sep-22 100.33 9147.45 0.33% 1.37%
31-Oct-22 103.95 9544.40 3.61% 4.34% 68.00 1.52 2.08 0.94
30-Nov-22 107.88 9876.55 3.78% 3.48% 75.00 2.58 1.21 1.04
31-Dec-22 107.95 9554.45 0.06% -3.26% 102.00 -1.66 1.72 0.56
31-Jan-23 106.75 9222.05 -1.11% -3.48% 81.00 -1.13 2.24 0.57
28-Feb-23 104.75 8964.55 -1.90% -2.79% 87.00 -2.87 0.97 0.64
31-Mar-23 105.35 9007.90 0.60% 0.48% 88.00 -0.69 1.29 0.68
30-Apr-23 112.62 9404.00 6.90% 4.40% 76.00 4.44 2.46 0.78
31-May-23 115.61 9724.80 2.65% 3.41% 67.00 1.33 1.32 0.76
30-Jun-23 118.06 10104.35 2.12% 3.90% 53.00 0.85 1.27 0.72
31-Jul-23 123.01 10445.90 4.19% 3.38% 44.00 2.46 1.74 0.73
31-Aug-23 124.70 10284.95 1.37% -1.54% 55.00 0.14 1.23 0.70
30-Sep-23 125.99 10510.25 1.04% 2.19% 53.00 -0.06 1.09 0.70

Total 25.99% 15.88% - 6.92 18.62 -

Avg - - 70.75 0.58 1.54 0.74
*Returns from EQ – Equity Segment and DR – Derivative Segment have been calculated separately as per internal guidelines of the fund to give a break-up of the performance from both segments
Scenarios

A. Bearish -12.00%
B. Stable 0.00%
C. Bullish 12.00%
D. Extremely Bullish 24.00%
Scenario A Bearish
Scenario A Bearish
Nifty Returns -12.00%

Fund Return
- Performance EQ side -6.00%
- Performance DR side 1.25% x 12 15.00%
Total Gross Returns 9.00%

Outperformance (pre tax) 21.00%

*EQ - Equity Segment

*DR - Derivatives Segment
Scenario B Stable
Scenario B Neutral
Nifty Returns 0.00%

Fund Return
- Performance EQ side 0.00%
- Performance DR side 1.35% x 12 16.20%
Total Gross Returns 16.20%

Outperformance (pre tax) 16.20%

*EQ - Equity Segment

*DR - Derivatives Segment
Scenario C Bullish
Scenario C Bullish
Nifty Returns 12.00%

Fund Return
- Performance EQ side 6.00%
- Performance DR side 1.50% x 12 18.00%
Total Gross Returns 24.00%

Outperformance (pre tax) 12.00%

*EQ - Equity Segment

*DR - Derivatives Segment
Scenario D Extremely Bullish
Scenario D Extremely Bullish
Nifty Returns 24.00%

Fund Return
- Performance EQ side 12.00%
- Performance DR side 1.00% x 12 12.00%
Total Gross Returns 24.00%

Outperformance (pre tax) 0.00%

*EQ - Equity Segment

*DR - Derivatives Segment
Thank You
Scenario Summary of A,B,C,D

Scenarios A,B,C,D Bearish Neutral Bullish V Bullish

Nifty Returns -12.00% 0.00% 12.00% 24.00%

Fund Return
- Performance EQ side -6.00% 0.00% 6.00% 12.00%
- Performance DR side 1.25% x 12 15.00% 16.20% 18.00% 18.00%
Total Gross Returns 9.00% 16.20% 24.00% 30.00%

Outperformance (pre tax) 21.00% 16.20% 12.00% 6.00%

*EQ - Equity Segment

*DR - Derivatives Segment
 1. Winning
Or
Covered Call
(CC) Strategy
We believe in winning every hour/day by writing calls which
is our winning strategy and philosophy
Is the Volvin Covered Call strategy
capable of delivering 18-20%
returns in bearish or stagnant
markets?