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- PERFORMANCE
At Dwaith Funds, we believe that long-term, superior returns are the true measure of investment success. Our track record demonstrates our ability to consistently outperform major indices and deliver value to our investors.
- Tailored for Global Investors: Open to qualified clients outside India
- Minimum Investment: $1 Million USD
- Focus: Indian and emerging market equities
- Strategy: Value investing with a global perspective
Absolute Returns
We focus on generating strong absolute returns rather than just beating a benchmark.
Volatility Management
Our approach aims to deliver superior risk-adjusted returns, not just headline numbers
Compounding Effect
The power of our strategy becomes more evident over longer periods due to the effect of compounding.
- Consistent Outperformance: Our funds have consistently beaten major indices across different market conditions.
- Downside Protection: In challenging years like 2022, we demonstrated our ability to protect capital better than the broader market.
- Strong Recovery: Our 2023 performance showcases our capacity to capitalize on market opportunities swiftly.
- Long-Term Focus: While we’re proud of our short-term results, we encourage investors to focus on our long-term performance, which aligns with our investment philosophy.
While we don’t disclose individual stock performances, our returns have been driven by:
- Successful stock selection across various sectors
- Timely entry into emerging trends and sectors
- Patience with high-conviction ideas, allowing them to reach full potential
- Effective risk management and portfolio construction
In addition to absolute returns, we monitor several risk-adjusted performance metrics:
- Sharpe Ratio
- Sortino Ratio
- Maximum Drawdown
- Alpha Generation
These metrics consistently demonstrate our ability to generate returns while managing risk effectively.
While we don’t manage our funds to track or beat any specific benchmark, we provide comparisons to major indices for context. Our goal is to outperform these benchmarks over the long term:
- S&P 500 (for global context)
- MSCI Emerging Markets Index
- Sensex / Nifty (for Indian market comparison)
While we don’t manage our funds to track or beat any specific benchmark, we provide comparisons to major indices for context. Our goal is to outperform these benchmarks over the long term:
- Past performance doesn’t guarantee future results
- Short-term underperformance can occur as we maintain our long-term focus
- Our concentrated approach may lead to higher volatility compared to broader indices
We are committed to transparent and accurate performance reporting:
- Performance is reported net of all fees and expenses
- We use industry-standard calculation methodologies
- Our results are audited annually by a reputable third-party firm
- Regular Performance Updates: Quarterly reports and annual detailed reviews
- Clear Communication: We explain the drivers behind our performance, good or bad
- Continuous Improvement: We regularly review and refine our investment process
Ready to Invest?
While past performance doesn’t guarantee future results, our disciplined approach and unwavering commitment to our investment philosophy position us well for continued success.
Invest with Dwaith Funds and align your capital with a proven strategy for long-term wealth creation in the dynamic world of emerging markets.
Dwaith Funds will never be an open-ended, large partnership with thousands of partners. Likely, Dwaith Funds will have a few dozen member partners and manage a few hundred million dollars with the partners invested for the long term. Word of mouth will likely be the biggest growth marketing strategy of Dwaith Funds.
We will focus excessively on setting the right processes (taxation, auditing, banking, custodian relations). We have excellent banking, auditing, and custodian partners. UBS in the USA, HDFC in India as Bankers and Custodians, Rashmin Sanghvi Associates as FEMA/FERA/SEBI and taxation experts, Tjong & Hsia as SEC, fund management & taxation advisors and lawyers.
Further growth will largely depend on the investment returns and the stewardship attitude shown by Dwaith Funds towards its limited partners.
The operational agreement and limited liability agreements are very clear. Upon dissolution, the partners will get the equivalent amount of shares of underlying holdings. They can be distributed as-is or sold by a designated liquidator to distribute equivalent money.
Absolutely. K-1s and detailed equity statements will be issued annually that disclose investors’ tax liability. Also, most investments will be made with long-term (LT) gains in mind. If a position warrants to be sold for short-term (ST) gains due to some compelling reason (growth, gets quickly over-valued, etc) – such actions will be promptly made. Audited statements will be provided.
There will be no entry or exit loads. However, administrative charges or legal charges will be collected as and when they arise (at actuals). There will be no penalty fees or punitive charges.
A notice of 60 days is recommended for withdrawal and annual withdrawals would be the best way to withdraw. Fresh investments can be made monthly or at the discretionary approval of the managing partner per the operational agreement.
Performance fees (25% of returns over 6% hurdle rate) are billed annually to Dwaith Partners and Dwaith PMS. They will only apply with standard high-water marks (i.e., funds will need to be always at all-time highs for any performance fees to become applicable). If for a given year (or multiple years until high water mark is achieved), the returns are sub 6%, no performance fees will be payable to the managing partner.
Today, Indian tax laws do not permit Indian citizens to invest in funds based outside of India that invest into India (roundtripping under Reserve Bank of India guidelines: Link). However, if these laws change, the managing partner will have a large (>50%) percentage of his wealth in Dwaith Partners in the US. Dwaith PMS holds a large of the managing partner’s money.
All of the managing partner’s investments are made in the same manner as Dwaith Partners and the interests of partners are 100% aligned as he will not be paid unless he meets the minimum 6% returns threshold. Asset gathering will not give him extra money as no percentage of AUM (Assets Under Management) is charged as fees. Typically Hedge Funds charge 1-2% of AUM as fees and typically drive their interest in asset accumulation.
Since 2018 (when he moved back from the US), Harsha has been financially independent. He is not dependent on Dwaith Funds. He will never draw a remuneration from Dwaith Funds.
He hates the idea of countries controlling skilled people working/living freely. He held permanent residency permits in Germany (Niederlassungserlaubnis) and the USA (Green Card) previously. He gave up the residency permits, not to hold-up slots for other skilled workers who might benefit from the same, and more importantly to simplify his taxes.
One of his main ideas for the next decade and beyond is the democratization of capital taking place across the world. This will lead to growth in parts of the world that were limited due to the lack of opportunities/capital. Physical boundaries are becoming less relevant in the world as technology is linking the world in interesting ways. Some of his thoughts are explained in the 2020 investment letter written during the Covid pandemic.
India will remain the principal destination for investments. Investments will be made based on two factors: 1) Comfort in Return ‘of’ Investment vs. Return ‘on’ Investment. If the country or company offers stability of the investment and has sufficient risk to reward offering and 2) Opportunity cost (versus existing investments) and the relative discounts at which the stocks are trading and the likely tax implications for switch-over
Likely, a portion of the portfolio over the years will find itself in countries outside of India (emerging and frontier markets). The managing partner’s general view on this as well as the concept of endurance and permanence are explained in his 2018 investment letter.
Money will be returned to the partners in such a scenario. This situation is likely to happen in the next decade or two and we will be prepared to right size or close the funds under such circumstances.
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