Vindex series from Vivekam is to help any investor build better portfolios, with utmost ease, and be able to extract higher returns from their investment in markets. Historical returns of these portfolios are offered through Vivekam’s back testing window to check the returns between any two dates. Vivekam will extend Alert & Assist service, if needed, to clients desirous of taking help from us to build and maintain portfolios.
Earning better than Nifty has always remained a dream for many investors, be it short-term, medium-term or long-term. When investors notice good profits in their portfolios and attempt to compare the returns offered by index Nifty, most of the times they will be surprised to realise, that the returns offered by Nifty are either equal or more. Same is the case with many mutual funds who are unable to catch up with the performance offered by Nifty over long-term. A handful of mutual funds who managed to outperform Nifty are often touted as visionaries and market leaders, with most retail investors rushing to park their money with them.
In the light of this situation, Vivekam has developed several strategies to build and maintain portfolios with built in mechanism to effect changes as and when required. When these strategies were back tested, the performance has been significantly better than Nifty on most occasions. To prove the efficacy of these strategies, Vivekam launched its products BIO Growth, BIO Secure, SMILES Growth and SMILES Secure about two years back. The performance of these products for different investors is now available live with Vivekam and more than 95% of the portfolios have returned a superior performance when compared to Nifty. Since the back testing was conducted for a minimum period of three years and ranging up to 5 years, it will be unfair even to call the balance 5% of portfolios (which, at this point of time are underperforming Nifty) as underperformers. Vivekam is confident that these portfolios also will turn around and beat Nifty by the time they complete three-year period.
Not being content with the success of its products, Vivekam has decided to offer a product that has mass appeal to vast majority of investors and is easy enough to understand. While most fund managers, be it in mutual funds or portfolio management, are hesitant to announce the composition of stocks in respective portfolios at the end of every day, Vivekam has decided to make it public and be open to scrutiny by any discernible investor.
Vivekam has decided to use Large Cap BIO strategy to build portfolios with 5 and 10 stocks. These portfolios are called Vindex large cap 5 and Vindex large cap 10. To make comparison simpler and easy to follow, Vivekam has converted the initial corpus amount of 10 lakhs into units of Rs. 10 each at the beginning. Then, the market value of each unit is compared at the end of every day just like any other mutual fund and the data thus collected is compared with Nifty. Therefore for the limited purpose of comparison, we can consider Vindex large cap 5 as a mutual fund scheme.
Relative strength of Vindex large cap 5:
When we compared the progress of NAV of Vindex large cap 5 with that of Nifty, some interesting facts emerged. As has been the habit of Vivekam, we tracked the performance of every one year period that is possible from the date of starting Vindex large cap 5 till 30 October 2013. A one year period starting on January 1, 2003 will end on 31 December 2003. Another one year period starting on January 2, 2003 will end on January 1, 2004. Similarly another year could be starting on March 1, 2003 and end on February 29, 2004. Like this, we gathered 2445 cases of 1 year period, 2194 cases of 2 years period, 1945 cases of 3 years period, 1625 cases of 4 years period and 1455 cases of 5 years period. The performance of Vindex large cap in periods ranging from 1 to 5 years was as follows.
Vivekam’s practice of ranking mutual funds has been to put them in 5 possible slots. They are very bad, bad, moderate, good and very good. Based on overall performance of mutual fund on several parameters, for each period under coverage, these rankings are assigned. When we followed the same methodolory for Vindex large cap 5, the rankings were as shown above.
Let us now present how Vindex large cap 5 performed when compared with Nifty in all the possible periods. When we checked all possible instances in 1 year period, out of 2445 cases Nifty fared better than Vindex large cap 5 in 612 cases which is equal to 25.03%. When we checked for 2 year period, out of 2194 cases Nifty did better than Vindex large cap 5 in 142 cases or 6.47%. When we compared the 3 year period, out of 1945 cases Nifty managed to do better in only 25 cases which is equal to a miniscule 1.29%. Going further when we checked for 4 year period, out of 1625 cases, Nifty could not manage to beat Vindex large cap 5 even once. Similarly when we compared it for 5 year period, in all possible 1455 cases, Vindex large cap 5 managed to do better than Nifty. Hence we called Vindex large cap 5 moderate for 1 year period, good for 2 year period and very good for 3, 4 and 5 years periods. The following picture gives you the statistics referred here. The status of Vindex large cap 5 was stated as Mutual Fund in the following table.
Then we went ahead to compare the absolute returns given by Vindex large cap 5 with that of fixed income securities like banks. For easy comparison we took 9% per year as interest payable by banks. When we checked for effectiveness of Vindex large cap 5, in 1 year period, banks were better in 24.17% cases, in 2 year period banks were better in 20.88% cases. When it comes to 3 year period, banks could only manage to do better than Vindex large cap 5 in 4.01% cases. The banks have yielded better returns in 4.96% cases when we compared 4 years period. However, when we compared 5 years period banks could manage to beat Vindex large cap 5 in only one instance or 0.07%. The following table provides the comparison with banks statistics. The status of Vindex large cap 5 was stated as Mutual Fund in the following table.
Retail investors are often interested not to lose anything out of their principal. To provide some insight to such investors, we compared the number of instances when Nifty returned negative income with that of Vindex large cap 5. As the table below indicates, index has resulted in negative returns in 493, 538, 129, 104 and 40 cases in 1 year, 2 years, 3 years of 4 years and 5 years period respectively. The status of Vindex large cap 5 was stated as Mutual Fund in the following table. As you can see, Vindex large cap 5 has given negative returns in 396 times in 1 year periods and 81 times in 2 years periods. It never offered negative returns in 3,4 and 5 year periods. Vivekam’s other products like BIO Secure and BIO Growth statistics also were provided hereunder. One should realise that the returns from normal Bio Growth and normal Bio Secure may be slightly better than large cap 5 but will come with increased degree of volatility.
Vivekam is confident that investors using this product to model their portfolios will have mental piece and prosperity in the long run. Since investments are to be made only in large cap, drawdown in value even in most adverse situations is expected to be contained. Reaching financial goals may be that much easier with products that have built in safety features like Vindex series.
Those desirous of seeking help from Vivekam to build and maintain their portfolios on the lines of Vindex Large Cap5 or Vindex Large Cap10 may write to email@example.com or contact our office at your convenient time.