Almost a year since we launched our equity portfolios on smallcase, and boy, what a year it has been!
Since October 2021, the Nifty 50 is down 5%. But that’s not the tough part, the volatility is what kills. Over the year, the Nifty touched a high of 18,477 (+5% from October 2021), and a low of 15,293 (-13% from October 2021) - that’s a wild 18% range!
How have we been after the rollercoaster ride? Happy and not throwing up! Just one portfolio underperforming the Nifty. Just one, and that too at -6% versus -5% for Nifty 50. Pretty immaterial, we reckon.
But the highlight has been the performance of Monopolies - our star portfolio, with +19% returns over the last year.
Portfolio | 1Y Returns |
|---|---|
Rocketship | +5% |
Monopolies | +19% |
Disruptors | -6% |
Bread & Butter | 0% |
Value Migration | +9% |
Central to our outperformance has been the foresight we apply, basis our experience. Despite toughening conditions, we are content with our current portfolio positioning. Over the last few months, we’ve made sure we’ve picked stocks keeping several factors in mind:
Recognition of larger trends and aligning portfolios with them
Prudent stock selection basis three key factors:
Sectoral tailwinds
Earnings visibility
Valuation comfort
Given this foresight in action, we are making very few changes to our current stance.
Changes in Portfolios
Portfolio | Additions | Deletions |
|---|---|---|
Rocketship | - | - |
Monopolies | - | - |
Disruptors | - | - |
Bread & Butter | - | - |
Value Migration | - | - |
Socially Responsible Investing | Tech Mahindra | Balakrishna Industries |
Why the Changes?
Socially Responsible Investing
Additions | Reason |
Tech Mahindra | - Tech stocks have taken a massive beating over the last few months, and we reckon it would be a good idea to start accumulating some of these for the long term - Tech Mahindra will be one of the major beneficiaries of a global movement to 5G - Valuations have started to look attractive post the fall, and given the opportunities in the Telecom space |
Deletions | Reasons |
Balakrishna Industries | - Balkrishna gets a major chunk of its revenue by selling agricultural, industrial and Off-Highway Tyres in the international markets - Slowing growth in the West can cause a dent in earnings - Slower growth has already started showing up in quarterly earnings and in management commentary |
While we are making minimal changes to our portfolios, we see the following of the markets over the coming months:
Regressive monetary policy across global central banks
Slowing economic growth
A slow and gradual decline in inflation, lest supply issues discontinue
In this scenario, while India remains the fastest growing economy, which is on a structural up-move, the markets are likely to be rocked by global factors. Our strategy to tackle this situation would be to consistently keep buying large dips.
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