What if we were a mutual fund company and launched a new scheme in a bullish market? That would be the true test of stock-picking and market-timing skills. That’s exactly the test we are putting ourselves to
The long-term stockgrader, which has been running for just under four years, has proved its worth. Compounded returns of the portfolio were 38.37% over these years when returns from the Sensex were 16.34% while the best equity scheme, SBI Emerging Business Fund - Growth, returned 40.27%. Not bad for our portfolio.
The equity market has run up a lot now; we are possibly near a cyclical peak. This is a 
challenging period. Should new money be put to work now or should some profits be booked? What should be the strategy when bullishness is so high? This would be the right time to challenge our stock-picking and market-timing skills. We are, therefore, closing the existing long-term stockgrader and launching a revamped portfolio. We are excited about navigating the treacherous waters ahead. In one important way, the new table will be a big improvement. It will be a portfolio with specifed exposures, based on the following principles:
€ At any time, there will be a maximum of 50 stocks;
€ We are starting with a list of 20. This means that the portfolio starts with 60% in cash;
€ The stock allocation will be equally weighted for each sector barring exceptional situations;
€ Stocks will be picked only from from the large- and mega-cap segments of the Moneylife database.
We hope to not only beat the Sensex and the Nifty but also be as good as the best five large-cap mutual fund schemes over the long term.
To know about the stocks recommended, please see the latest issue of Moneylife.
Do write to us at [email protected] and tell us what you think of this intiative and the portfolio.
Inside story of the National Stock Exchange’s amazing success, leading to hubris, regulatory capture and algo scam
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30-day online access to the magazine articles published during the subscription period.
Access is given for all articles published during the week (starting Monday) your subscription starts. For example, if you subscribe on Wednesday, you will have access to articles uploaded from Monday of that week.
This means access to other articles (outside the subscription period) are not included.
Articles outside the subscription period can be bought separately for a small price per article.
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Such wealth management companies boast of 12% annual returns which is nothing compared to moneylife's performance of more than 35% per yr in a stagnating market of last 2 yrs.
By relying on moneylife or kensource recommendations,we can run our business just as effectively without spending too much time on stocks.
Also moneylife and kensource gives very good guidance when NOT to buy and when to sell which is critical for performance of the portfolio.(which wealth management companies deliberately mislead to earn illegal fat cash commission)
Suketu
Rgds
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