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Performance of our Recommended Portfolios from Nov 2016-Oct 2018
November 29, 2018

The note is a quick update on the Performance of our Recommended Portfolios during Nov 2016-Oct 2018.


Author : Author: iFAST Research Team



Recommended Portfolio Update - June 2018

Our Recommended Portfolios were first created on February 26, 2010. They undergo a change whenever our outlook on the equity market changes or when we revise our recommended funds' list. Hence, annually as we release the new list of recommended funds every year, our portfolios also undergo a change.

Prior to November this year, we had last revamped our Recommended Portfolios on November 30, 2016. This note is a quick update on the performance of the portfolios in this time (November 30 2016 to October 31, 2018). We have taken a hit across all the portfolios vis-a-vis our internal benchmarks during this time period. Out of the 16 funds included in the portfolio in 2017, only 7 funds were cleared by our model in the current year. This excludes ultra short term bond funds (Franklin India Ultra Short Bond Fund in this case) since they are not subject to the model, and are selected based on internal parameters.

However, a quick glance through our since-inception performance shows that, except for our global portfolios, all the domestic oriented portfolios have outperformed the internal benchmarks.

What does this mean for our investors?

Investors should not get nervous and start pressing the panic button. As we wrote in our Research Note on iFAST Recommended Mutual Funds 2018-19, "An exit (of a fund) from the list does not imply an exit from investor portfolios as well. This table should give confidence to our investors that our model may leave out funds if they don't clear the filters; however, a few years later the same funds can be back in the list. In cases where we do revise our opinion of a fund and are no longer comfortable holding onto them in any investor portfolio, we will definitely update the investors. But if there is no communication from our side, investors can continue with their existing SIPs and lumpsum investments into the funds."

We maintain that all the funds that the model did not clear should still be held on to, as we believe that they are going through a short phase of volatility and their exit from the current list of Recommended Funds may not be final.

A quick note on our benchmark

When we introduced our portfolios in February 2010, we were over-weight on equities and hence our asset allocation along with our internal benchmarks were aligned with this stance. However, in November 2010, we changed our stance on Indian markets to neutral as we believed that the market was overvalued on an absolute and a relative basis. We have remained neutral on India since, and the asset allocation in our portfolios and the internal benchmarks have been modified to reflect this stance.

As our over-weight stance on India and the corresponding asset allocation among portfolios and benchmarks were applicable only for a very short period of time, the since-inception benchmark returns shown in this note reflect our neutral stance.


1. Conservative Portfolio

Initial Investment (Feb 2010):

Rs. 1,00,000

Portfolio Return (Nov2016-Oct 2018):

4.77%

Portfolio Value (Oct 2018):

Rs. 2,03,983

Benchmark Return (Nov2016-Oct 2018):

5.48%

 

 

  Portfolio CAGR Since Inception:

8.56%

 

 

  Portfolio Benchmark Since Inception:

8.04%

 

Portfolio Allocation:
90%: Bond funds
10%: Equity funds

Portfolio Components:

Debt Funds
Franklin India Ultra Short Bond Fund (Ultra Short Duration): 8.00%
Kotak Credit Risk Fund (Credit Risk): 5.52%
DSP Credit Risk Fund (Credit Risk): 3.29%
Aditya Birla Sun Life Dynamic Bond Fund (Dynamic): 0.48%
SBI Credit Risk Fund (Credit Risk): 5.66%

Equity Funds
ICICI Prudential BlueChip Fund (Large Cap): 12.97%
SBI BlueChip Fund (Large Cap): 8.36%



2. Moderately Conservative Portfolio

Initial Investment (Feb 2010):

Rs. 1,00,000

Portfolio Return (Nov2016-Oct 2018):

6.52%

Portfolio Value (Oct 2018):

Rs. 2,15,113

Benchmark Return (Nov2016-Oct 2018):

8.53%

    Portfolio CAGR Since Inception:

9.22%

    Portfolio Benchmark Since Inception:

8.42%

 

Portfolio Allocation:
70%: Bond funds
30%: Equity funds

Portfolio Components:

Debt Funds
Franklin India Ultra Short Bond Fund (Ultra Short Duration): 8.00%
Kotak Credit Risk Fund (Credit Risk): 5.52%
DSP Credit Risk Fund (Credit Risk): 3.29%
Aditya Birla Sun Life Dynamic Bond Fund (Dynamic): 0.48%
SBI Credit Risk Fund (Credit Risk): 5.66%

Equity Funds
ICICI Prudential BlueChip Fund (Large Cap): 12.97%
SBI BlueChip Fund (Large Cap): 8.36%
Kotak Standard Multicap Fund (Multi Cap): 11.95%



3. Balanced Portfolio

Initial Investment (Feb 2010):

Rs. 1,00,000

Portfolio Return (Nov2016-Oct 2018):

8.05%

Portfolio Value (Oct 2018):

Rs. 2,30,763

Benchmark Return (Nov 2016-Oct 2018):

10.33%

    Portfolio CAGR Since Inception:

10.11%

    Portfolio Benchmark Since Inception:

8.64%

 

Portfolio Allocation:
50%: Bond funds
50%: Equity funds

Portfolio Components:

Debt Funds
Franklin India Ultra Short Bond Fund (Ultra Short Duration): 8.00%
Kotak Credit Risk Fund (Credit Risk): 5.52%
DSP Credit Risk Fund (Credit Risk): 3.29%
Aditya Birla Sun Life Dynamic Bond Fund (Dynamic): 0.48%
SBI Credit Risk Fund (Credit Risk): 5.66%

Equity Funds
ICICI Prudential BlueChip Fund (Large Cap): 12.97%
SBI BlueChip Fund (Large Cap): 8.36%
Kotak Standard Multicap Fund (Multi Cap): 11.95%
Canara Robeco Emerging Equities (Large & Mid Cap): 14.13%



4. Moderately Aggressive Portfolio

Initial Investment (Feb 2010):

Rs. 1,00,000

Portfolio Return (Nov2016-Oct 2018):

9.88%

Portfolio Value (Oct 2018):

Rs. 2,71,766

Benchmark Return (Nov 2016-Oct 2018):

11.51%

    Portfolio CAGR Since Inception:

12.20%

    Portfolio Benchmark Since Inception:

8.78%

 

Portfolio Allocation:
30%: Bond funds
70%: Equity funds

Portfolio Components:

Debt Funds
Franklin India Ultra Short Bond Fund (Ultra Short Duration): 8.00%
DSP Credit Risk Fund (Credit Risk): 3.29%
Tata Dynamic Bond Fund (Dynamic): 2.28%

Equity Funds
Aditya Birla Sun Life Frontline Equity Fund (Large Cap): 10.10%
Kotak Standard Multicap Fund (Multi Cap): 11.95%
ICICI Prudential Value Discovery Fund (Value): 8.69%
Canara Robeco Emerging Equities (Large & Mid Cap): 14.13%
Reliance Small Cap Fund (Small Cap): 14.90%
ICICI Prudential Banking & Financial Services (Sectoral/Thematic): 13.55%



5. Aggressive Portfolio

Initial Investment (Feb 2010):

Rs. 1,00,000

Portfolio Return (Nov2016-Oct 2018):

10.72%

Portfolio Value (Oct 2018):

Rs. 2,95,491

Benchmark Return (Nov 2016-Oct 2018):

12.35%

    Portfolio CAGR Since Inception:

13.29%

    Portfolio Benchmark Since Inception:

8.88%

 

Portfolio Allocation:
10%: Bond funds
90%: Equity funds

Portfolio Components:

Debt Funds
Franklin India Ultra Short Bond Fund (Ultra Short Duration): 8.00%
DSP Credit Risk Fund (Credit Risk): 3.29%
Tata Dynamic Bond Fund (Dynamic): 2.28%

Equity Funds
Aditya Birla Sun Life Frontline Equity Fund (Large Cap): 10.10%
Kotak Standard Multicap Fund (Multi Cap): 11.95%
ICICI Prudential Value Discovery Fund (Value): 8.69%
Canara Robeco Emerging Equities (Large & Mid Cap): 14.13%
Reliance Small Cap Fund (Small Cap): 14.90%
ICICI Prudential Banking & Financial Services (Sectoral/Thematic): 13.55%
Canara Robeco Infrastructure (Sectoral/Thematic): 2.82%



6. Moderately Aggressive (Global) Portfolio:

Initial Investment (Feb 2010):

Rs. 1,00,000

Portfolio Return (Nov2016-Oct 2018):

10.64%

Portfolio Value (Oct 2018):

Rs. 2,57,549

Benchmark Return (Nov 2016-Oct 2018):

13.17%

    Portfolio CAGR Since Inception:

11.51%

    Portfolio Benchmark Since Inception:

12.25%

 

Portfolio Allocation:
30%: Bond funds
45%: Domestic equity funds
25%: Overseas Fund

Portfolio Components:

Debt Funds
Franklin India Ultra Short Bond Fund (Ultra Short Duration): 8.00%
DSP Credit Risk Fund (Credit Risk): 3.29%
Tata Dynamic Bond Fund (Dynamic): 2.28%

Equity Funds
Aditya Birla Sun Life Frontline Equity Fund (Large Cap): 10.10%
Kotak Standard Multicap Fund (Multi Cap): 11.95%
ICICI Prudential Value Discovery Fund (Value): 8.69%
Canara Robeco Emerging Equities (Large & Mid Cap): 14.13%
Reliance Small Cap Fund (Small Cap): 14.90%
ICICI Prudential Banking & Financial Services (Sectoral/Thematic): 13.55%

Overseas Fund
ICICI Prudential Global Stable Equity Fund (FOFs Overseas): 9.60%
Franklin India Feeder - Franklin U.S. Opp. (FOFs Overseas): 20.80%


7. Aggressive (Global) Portfolio

Initial Investment (Feb 2010):

Rs. 1,00,000

Portfolio Return (Nov2016-Oct 2018):

11.30%

Portfolio Value (Oct 2018):

Rs. 2,67,794

Benchmark Return (Nov 2016-Oct 2018):

13.34%

    Portfolio CAGR Since Inception:

12.01%

    Portfolio Benchmark Since Inception:

12.28%

 

Portfolio Allocation:
10%: Bond funds
59%: Domestic equity funds
31%: Overseas Fund

Portfolio Components:

Debt Funds
Franklin India Ultra Short Bond Fund (Ultra Short Duration): 8.00%
DSP Credit Risk Fund (Credit Risk): 3.29%
Tata Dynamic Bond Fund (Dynamic): 2.28%

Equity Funds
Aditya Birla Sun Life Frontline Equity Fund (Large Cap): 10.10%
Kotak Standard Multicap Fund (Multi Cap): 11.95%
ICICI Prudential Value Discovery Fund (Value): 8.69%
Canara Robeco Emerging Equities (Large & Mid Cap): 14.13%
Reliance Small Cap Fund (Small Cap): 14.90%
ICICI Prudential Banking & Financial Services (Sectoral/Thematic): 13.55%
Canara Robeco Infrastructure (Sectoral/Thematic): 2.82%

Overseas Funds
ICICI Prudential Global Stable Equity Fund (FOFs Overseas): 9.60%
Franklin India Feeder - Franklin U.S. Opp. (FOFs Overseas): 20.80%

 

 

Our Benchmark Index

Benchmark Index*

Conservative

M Conservative

Balanced

M Aggressive

Aggressive

M Aggressive
(Global)

Aggressive
(Global)

Crisil Composite Bond Fund Index

90%

70%

50%

30%

10%

30%

10%

S&P BSE 100

10%

30%

50%

70%

90%

45%

60%

MSCI World Index

0%

0%

0%

0%

0%

25%

30%

* Benchmark Indices created using Neutral allocation



iFAST and/or its content and research team’s licensed representatives may own or have positions in the mutual funds of any of the Asset Management Company mentioned or referred to in the article, and may from time to time add or dispose of, or be materially interested in any such. This article is not to be construed as an offer or solicitation for the subscription, purchase or sale of any mutual fund. No investment decision should be taken without first viewing a mutual fund's offer document/scheme additional information/scheme information document. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. Investors should seek for professional investment, tax, and legal advice before making an investment or any other decision. Past performance and any forecast is not necessarily indicative of the future or likely performance of the mutual fund. The value of mutual funds and the income from them may fall as well as rise. Opinions expressed herein are subject to change without notice. Please read our disclaimer on the website.



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