Going by the government’s thinking, all retail investors are supposed to be investing through mutual funds but not directly into the stock market. In this article, we make an attempt to compare mutual fund investment versus Vindex Portfolio Tracking. Vindex Portfolio Tracking is actively tracking a portfolio and making changes in own portfolio to closely follow the composition of model portfolio. Index funds set up by mutual funds have been engaged in this practice for a long time. With a corpus collected from the investors, the fund houses create a portfolio that has similar composition like that of index it intends to track. On the same lines, Vivekam has built portfolios based on its proprietary processes and has given a name VINDEX for this series. When Vivekam builds portfolio with large cap stocks it becomes Vindex large cap. If Vivekam chooses 10 stocks to be included, it will become Vindex large cap 10. If there are only five stocks in portfolio thus created, that may be called Vindex large cap 5.
Drawbacks of Mutual Funds:
- NO TRANSACTIONAL INFORMATION: Mutual Funds donot share information on their transactions or the reasons for buying and selling with investors. All investors are expected to hold a belief that “All is well”.
- CUSTODY OF MONEY IS LOST: Losing control and custody of the money that has been saved with great effort is normally uncomfortable for many retail investors. If the logic of investment is explained, demonstrated and proven beforehand and followed up with a promise that the custody of money will never have to be lost, many more investors will plunge into this form of investments.
- NAV ONLY BASIS: Investment in mutual funds can only be made at a rate published as NAV on each day. Once money is accepted, this money is pooled along with whatever cash that may have been lying with mutual fund and the stocks already bought earlier to arrive at an NAV for next day. Mutual funds, by law are expected to announce the details of shares held by them at the end of each month. If mutual funds announce their portfolios at the end of every day, it would be easier for investors to emulate portfolios on the model of mutual funds and closely track the performance of mutual fund. However, no mutual fund in this country announces the portfolio details each day.
Vivekam, a SEBI registered investment advisory from Hyderabad, has undertaken the task of coming up with a product titled “Vindex Large Cap5 and Vindex Large Cap10” to overcome the above shortcomings of Mutual Funds.
MODEL PORTFOLIOS BUILT: Vindex series from Vivekam is a unique product series in which Vivekam creates and runs portfolios in real life. From time to time, composition of stocks in the portfolio undergoes changes. To let Vivekam’s investors know the composition of portfolios on any given day, Vivekam provides a window through which anyone can ascertain the stocks held on any given day. They can even test the performance of the portfolio between any two different days.
ONLY LARGE CAPS: By definition of this product, Vivekam will not invest any stock that has a market capitalisation of less than 10,000 crores.
A SMALL COMPROMISE ON RETURNS: Vivekam is aware that large cap stocks are normally very well researched by a large brokerages, institutions and high net worth individuals leaving very little room for substantial price rise. To that extent Vivekam is fully aware that the profitability of this product may be a tad lower than that of bio growth but will come with a far lesser degree of volatility. Hence, a part of return is willingly compromised in order to bring down the volatility of returns from investments.
LARGECAP GROWTH LOGIC: Vivekam follows all the concepts of Large Cap Growth to build and maintain portfolios for the series Vindex large cap. Whenever there are changes required to be made, they will be made and changed composition of stocks will be announced. To help investors seeking to track this product, target rates for all the stocks are indicated in advance and on the day of selling stocks, the likely stocks to be included and their prices will be indicated. Vivekam will ensure all conditions required by Large Cap Growth are adhered.
BACK TESTING WINDOW: Through this back testing window, the investors will get a chance to compare the performance of portfolios , with nifty and leading mutual funds in India. Once investors gain confidence in Vivekam’s ability to construct profitable portfolios that are likely to perform better than nifty and leading mutual funds, they may sign up for this product with Vivekam and be informed whenever a change is warranted in the portfolio.
ALERT & ASSIST SERVICE: If the client wishes to seek the help of Vivekam in maintaining the ratio at all times, he may opt for a alert and assist service, whereby, Vivekam will alert the client and his broker simultaneously whenever a change is warranted in the portfolio. Once information on executed trades is supplied to Vivekam, if any fine tuning is required, Vivekam will pass the necessary instructions to client and to his broker to help the portfolio follow the percentage of stocks in model portfolio.
To ascertain the charges payable to Vivekam for running the service round-the-clock and 365 days a year, investors may write to info@Vivekam.co.in