Highest portfolio returns in October 2016

Our portfolio managed to give its investors 8.34% gains in the month of October, highest returns for the month of October, when compared to all other indices and Mutual funds in the Diversified funds category. Automated system based stock selection helped us be invested into the best businesses of India. When a portfolio contains only top performers, it shows up in the results.

For the October month, broad markets were subdued; SENSEX was flat with 0.23% gains. The broader 500 stock index too gave 1.44% in the same period. Diversified Mutual Funds fared better with maximum recorded gains of 5.40% by L&T India Value fund, while our portfolio achieved 8.34% in October 2016.

Outperforming all timeframes.03.11.16

We have been outperforming the NSE 500 benchmark across all time frames since inception date. Our portfolio has been tracked for the past 4 years since December 2012. We have achieved an absolute return of 91.30% as compared to 60.45% by the benchmark, more than 50% advantage to the broader benchmark.

Prominent sectors in our portfolio are Industrials with 25.60% exposure, Basic materials having 17.55% exposure followed by Financial Services with 17.45% exposure. And we have lowest exposure in the Utilities, have reduced exposure to the Healthcare Sector & have zero exposure to Technology.

Following continuous suits on the Pharma Industry by the USFDA, Healthcare Sector lost its shine with a lot of under performance. BREXIT has caused a severe dent on the Technology Sector, which is staring at the situation without any clue about solutions. There was no judgement or bias on decisions to keep off from these low performing sectors, our system takes care of the process and ensures that we are invested in the best always.

Some of the stocks like GNFC, ASTEC, RAMCO, Caplin Point, ADF Foods were stars in our portfolio, each of them giving more than 50% gains in October alone.

Our Discreet 12 month’s performance too has been outperforming both the major Benchmark SENSEX and the additional Benchmark NSE 500 in all the last 3 years, again with a wider margin. Where both the SENSEX and the NIFTY, the widely tracked economic benchmarks of India are yet to give a new high after their 2015 leads, our performance index has breached its historic and ventured into the uncharted territory.

How is the future?

While the longer term outlook for India is great, there are some immediate concerns which can have some stress on our markets, like the US presidential Elections and the Pakistan Insurgency. Time and again one or other incidences do crop in and have some destruction created, while all of them get passed off very soon and the markets get into their direction, which is always UP.

Performance report for July 2016

Markets have been doing well and there are media reports that there can be some correction. Which is true? Fundamentally on a broader perspective there is not much change seen in the earnings of companies. Then, why did the market take off post budget? Foreign Portfolio Investors who moved out of our markets post China crisis have returned back. FPI’s have poured more than $1 Billion into our markets.

Perf.31.07.16

When such high amount of money comes in, it will move the whole markets and that is what has happened. Businesses that were fundamentally strong, though there were very few, began to

Following BREXIT, markets have taken off well due to FPI inflows. More than a billion dollars have been invested in our markets in the last one month, which has helped in markets giving a good growth.

Metals & Infrastructure sectors were leaders in returns as they are moving up from the bottom, while on the fundamental side, the companies in these sectors are yet to show strength.

BREXIT and saturation in the BFSI segment which was contributing to growth in the Technology sector has turned the sector into the weakest in the prevailing markets.

SENSEX gained above 4% in the month of July, in line with our performance which stood at 4.20% for the month of July.

Our Exposure:

Being exposed to the right sectors that have the potential to get the best growth in the prevailing markets gives us an edge in performance. Our systems have ensured that we are invested in the right sectors. Presently, we are overweight on Financials, Cement, infrastructure, Sugar& Paper. NBFC businesses have got into an advantage position against the traditional banks. NPA’s position of NBFC’s has been fairly low when compared to the PSU peers. They are also placed well in the rural markets where the next thrust on the business growth is expected to happen. Likely boost in the consumption pattern after the 7th pay commission is getting factored into the market.

Financial sector has above 12% exposure in our portfolio. Bajaj Finance & Bharath Financial has been consistent performers following their robust result announcements.

PRS.Sector.31.07.16

We have had increased exposure into the Basic Materials sector comprising Metals and Chemicals, the sector that was down in the last year. After a good base formation there are some green shoots visible in this sector. Exposure was reduced in the Technology sector following weak performance numbers from the businesses in this sector.

Merger of Oil Marketing Companies into a single company was good news which helped the leader of this sector HPCL have good gains.

Result season though not very good on the broad perspective, it has pretty well on specific stocks. Stocks like Bajaj Finance, Bharat Financial, etc., have given phenomenal gains following result announcement. Good monsoon and subsequent rural demand have been helping in companies that have good rural presence gain momentum in the markets.

GST becoming a reality soon is also helping service sector businesses to gain as they are the biggest beneficiaries of this move. Following no new stimulants that have uncertainty in them, which can drive the markets from here, we are having small corrections and this correction is required often the markets to move out of weaker holdings and add new stocks into a portfolio.

Above 3% gain in June 2016.

stock-june-2016

For the month of June 2016, our markets took a breather from its rally. We had pressures from 2 events which were surprising, Raghuram Rajan exit and BREXIT. While both were shocking, none had any broad based impact on the markets. In BREXIT became an advantage to our markets. Post BREXIT, emerging markets became favorite’s among fund managers & India had an advantage.

In this period of uncertainty our portfolio had an edge. We had a gain of above 3% on our portfolio against the 2.40% gain achieved by the broad based indices.

Good news is that we have achieved this out performance against the benchmarks with only 60% exposure to Equity. Not fully exposed to the market is also an indicator that the markets are in the wait and watch mode yet. Following June and September results, we should see full loading to happen.

SENSEX could manage to be flat for the month, giving a clear indication that front line stocks are yet to show reasonable growth. It is the Midcaps and a selected few among them that are in good strength. Infrastructure sector had begun to show strength; we have about 5% exposure to the Infrastructure, Cement, Construction and Reality sectors. Most of the stocks in this sector have registered good gains.

ARSS Infrastructure has reached 100% gain within 30 days of our investment giving strength to the exposure we have in this sector.

Sugar & Paper along with NBFC’s are the leaders in the current market. Media stocks have shown growth, with the big releases like SULTAN, KABALI etc., to hit the screens this year, the rally here is likely to continue. We have PVR in our portfolio.

Automobile and Pharma exposure in our portfolio is getting considerably reduced. We have used the system rules to move of stocks and the action also eventually coincided with the future developments. There are news that Auto sector is likely to under perform and stocks are getting downgraded. Following the system diligently helps us be in the right sector at the right period and this has largely helped us outperform all the benchmarks.

Look forward to more fireworks in price moves in the coming months.

Post BREXIT…..

brexit

BREXIT was a shock to the markets on Friday morning because markets closed pretty much positive on Thursday. The sharp recovery after the shock in the same session though gives a relief that there is not much damage caused; it has shaken the beliefs of the traders whose activity is most needed for the markets to function.
Due to this high impact move last Friday SENSEX is likely to be on sideways range for a good amount of time. Automobile stocks have begun to move out of the portfolio because Europe was a bigger market for this sector.
Our markets are stronger when compared to the other emerging markets which will force fund flows that will keep the prices rising. There can be new sectors and leaders in those sectors that will begin to dominate in the performance in the coming months.
Infrastructure stocks are showing strength on their balance sheets as well as on their stock prices. There are likely chances of the Infra sector taking lead in the next rally are higher.
In our portfolio, though we have been adding new stock and increasing exposure, having a near 60% exposure into Equity and the rest of the capital parked in debt is helping us protect the impact of volatile market moves.
For the month of June we have had 2 negative news flows, Raghuram Rajan exit which was a kind of shrugged off and BREXIT which had a hit. Like how we have day and night in a day, markets also should have ups and downs, only then the fatigue of the earlier day can be overcome and new opportunities can be identified to have stronger growth to our savings.