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Rupeeting Core Portfolios | Strategy

Updated: Aug 17, 2023

Strategy 💡

Rupeeting's core portfolios are diversified and low-cost strategies that are meant to be the core holdings of investors. The strategy aims to invest across 5 asset classes through ETFs. The objective is to outperform corresponding balanced mutual funds net of fees.


Investment Methodology ⚙️

The Rupeeting Core investment process involves a mix of quantitative and deep fundamental research. The strategy aims to use extensive data crunching, portfolio construction models and market expertise to determine optimum weightage for the constituents of the portfolio.


The resulting portfolio consists of 5 asset classes, weights of which are such that the overall portfolio maximises returns for the amount of risk in the portfolio.


These portfolios are constantly monitored for updated data, metrics and forecasts. While the rebalancing frequency is quarterly, changes in views on asset classes or underlying instruments may deem a change even in the interim.


Investment Options 🍕

​Portfolio

Investor risk profile

Description

Asset allocation

Aggressive 🐴

High

Just some more allocation towards equity, and other asset classes that have a relatively higher risk. Keep up with the buzz you need, while also cushioning possible downturns.

​Percentage of Debt: 20-35%

Percentage of Risky Assets: 65-80%

Balanced 🦉

Medium

​Maintain a fine balance between risky and less risky investments.

Percentage of Debt: 40-60%

Percentage of Risky Assets: 40-60%

Conservative 🐻

Low

Safe investments with a lot of downside protection, and just a dash of high-risk-high-return allocation.

Percentage of Debt: 75-90%

Percentage of Risky Assets: 10-25%

Performance 🚀

Performance Metrics 📏

Metric

Aggressive 🐴

​Balanced 🦉

Conservative 🐻

Nifty 100

10-Year Cumulative Return

527%

375%

179%

218%

Annualised Return

20%

17%

11%

12%

Standard Deviation

25%

20%

12%

17%

Sharpe Ratio

0.68

0.69

0.64

0.54

Alpha

17%

14%

8%

9%

Beta

0.2

0.2

0.2

1.0

Best Month

10%

8%

4%

15%

Worst Month

-7%

-4%

-2%

-23%

Positive Periods

80

89

101

69

Negative Periods

40

31

19

51

How Much Does It Cost? ✏️

1 Month

Rs. 1,000

3 Months

Rs. 2,000

6 Months

Rs. 3,000

12 Months

Rs. 4,000

Exit Load

None

Lock-In

None

Investment Process 🎮

The investment process for Rupeeting's Core Strategy is two-fold - (1) Asset Allocation and (2) Portfolio Optimisation. The process across the two consists of:


1. Universe Definition

We include all major and investable asset classes in India, for which corresponding ETF instruments are available - equities (large, mid and small cap), debt (government and corporate), gold and international stocks.


2. Portfolio Branching

We define the amount of risk allocation for each of the three branches of the Core Strategy - Aggressive, Balanced and Conservative. For the sake of simplicity and standardisation, we use SEBI's categorisation of mutual fund schemes. We set the same brackets for our strategies:


Aggressive 🐴 (Percentage of Debt: 20-35%; Percentage of Risky Assets: 65-80%),

Balanced 🦉 (Percentage of Debt: 40-60%; Percentage of Risky Assets: 40-60%), and

Conservative 🐻 (Percentage of Debt: 75-90%; Percentage of Risky Assets: 10-25%)


3. Quantitative Methods

For the risky assets, we determine weights and allocation of capital in the portfolio basis The Modern Portfolio Theory, which conceptualises the Efficient Portfolio - maximum return expectation for given variance. The inputs required for this are forecasted returns and covariance between asset classes. While we use historical data and a reduction of estimation error for the covariance, we fall back on research for determining returns.


4. Fundamental Research

Historical returns make little sense in portfolio construction, since portfolio are built for the future. For forecasting returns, we rely on a two-step method incorporating the Capital Asset Pricing Model and research from our highly experienced investment team.


5. Portfolio Enhancement

Once forecasted returns are plugged in and the model throws out optimal portfolio weights, we use the Fama-French model to incorporate market factors like value and/or size.


We then use additional asset classes like Gold and International Stocks to further enhance the portfolio - increasing returns, and reducing risk.


6. Instrument Selection

Once we have the optimal asset-class weights and the portfolio composition in hand, we turn to selecting the right instruments to fit our requirements. Since ETFs track the underlying index, we use a rather simplistic constraint-based approach to select instruments.


Our criteria includes and is not limited to price (to limit the minimum investment amount on the portfolio), volume (to minimise tracking error and ensure timely execution), tracking error, and disparity between the price and NAV of the ETF.


Monitoring and Rebalancing 🤓

Portfolio construction is just the beginning of the investment journey. Portfolio management and disciplined assessment and rebalancing are keys to generating wealth consistently over the long term. Our singular objective - make you more money!





 

Disclaimer

Alphaware Advisory Services Private Limited (Brand Name - Rupeeting) makes no warranties or representations, expressed or implied, on products and services offered through the platform. It accepts no liability for any damages or losses, however, caused in connection with the use of, or on the reliance of its advisory or related services.


Past performance is not indicative of future returns. Please consider your investment requirements, risk tolerance, goals, time horizon, risk and reward appetite, and the cost associated with the investment before choosing a fund, or designing a portfolio that suits your needs.


Performance and returns of any investment portfolio can neither be predicted nor guaranteed.

Investments in mutual funds, stocks, ETFs and any other investment products that you see Rupeeting's views being expressed on are subject to market risks. Please read all scheme related documents carefully.


Performance results do not include any fees or charges that may be incurred by investors, including the advisory fees charged by Alphaware Advisory Services Private Limited.


The strategies referred to in this document have been launched in August 2021. Any representation of the performance of these strategies prior to that is basis time-based backtesting of the strategy. All figures represent performance of a hypothetical account created on Rupeeting's Core Strategies with a hypothetical launch date of July 1, 2011.


Annualised Return refers to a ten-year Compounded Annual Growth Rate (CAGR). Standard Deviation is the annual standard deviation seen over the same ten-year period. For Sharpe Ratio, and Alpha, the risk-free rate used is of 3%, which is the return on the Nifty 1D Rate Index in 2021.


All performance metrics using results for Rupeeting's Core Strategy, when compared to the performance of the Nifty 50 Index is for informational purposes only. Reference or comparison to an index does not imply that the strategy will be constructed in the same way as the index or achieve any of the performance metrics similar to the index.


Performance results were prepared by Rupeeting, and have not been compiled, reviewed or audited by an independent accountant.


Certain information contained herein constitutes “forward-looking statements”. Due to various risks and uncertainties, actual events or results or actual performance may differ materially from those reflected or contemplated in such forward-looking statements. As a result, investors should not rely on such forward-looking statements in making their investment decisions. No representation or warranty is made as to future performance or such forward-looking statements.


© Alphaware Advisory Services Private Limited


[SEBI RIA Registration No: INA000015747] [Validity of registration: February 08, 2021-Perpetual] [Address: 1 Janki Centre, Off Veera Desai Road, Andheri West, Mumbai 400053] [Principal Officer details: Mr. Sagar Lele, Email ID: sawaal@rupeeting.com, Contact No. +91-22-26730890]


[ARN - 168001] [Platform Partner: BSE (Member code-3864501), smallcase, WealthDesk] [CIN – U74999MH2019PTC320573] [GST No: 27AARCA8847R1ZF]

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