Stay the Course with Equities. Volatility isn’t the Time to Sell.
Indian stock markets have welcomed the outcome of recently held elections on a positive note. The sentiment has been so good that benchmark stock indices have recorded an appreciation of over 15% in the months of April and May. Some indices like real estate, banks and infrastructure have appreciated close to 25% in the same period.
Portfolios of retail investors, in general, must also have appreciated in line with buoyancy in stock markets. However an investor should be happy only when his portfolio earns him more than the broad market indices. Clients being advised by Vivekam have seen their portfolio values surge steeply in the same time backed by the process of loading portfolios with undervalued growth stocks at all times.
Vivekam has always been in the forefront to explain the methodology adopted. Vivekam has been risking its neck out by giving out the top 10 ranked companies out of large cap, mid cap etc on all days. It is interesting to take a close look on how these stocks performed in the period of April and May 2014. There were 38 trading days in these months and Vivekam had come out with 380 recommendations at a rate of 10 stocks per day. In order to measure the effectiveness of recommendations Vivekam compared the price differential between the recommended price on a given date and the peak price touched by the same script before the end of May 2014. Then, this value is compared with the differential between closing index on a given day and the peak index touched before the end of May 2014.
It is now on record for anyone to check the fact that 268/380 recommendations have performed better than index indicating a success rate of 70%. This implies that Vivekam’s choices help you capture all the upside as a result of buoyancy in markets and also help you earn a little more. When we checked the efficacy of MidCap recommendations, 79% of the recommendations have outperformed the index.
In continuation of our exercise to compare the performance of our investment products vis-a-vis leading diversified mutual funds of India, we carried out our study from the inception of the company till end of May 2014. In this study, we assumed as though all clients and on all days have invested their money in mutual funds at their NAVs. Then, we aggregated the possible units that could have been accumulated with such investments in various mutual funds and arrived at the net present value of such investments. We compared such values of all mutual funds with the actual portfolio values of clients using Vivekam’s products only to realise that the best mutual fund was 20% behind Vivekam’s products.
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Performance of Mutual funds Vis-à-vis Vivekam Products |
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Birla SL Dividend Yield Plus(G) |
51,860,071 |
53.84% |
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Birla SL Equity Fund(G) |
55,658,941 |
70.49% |
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DSPBR Equity Fund-Reg(G) |
52,852,322 |
58.19% |
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Franklin India Flexi Cap Fund(G) |
52,820,678 |
58.05% |
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Franklin India High Growth Cos Fund(G) |
53,510,355 |
61.07% |
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Franklin India Prima Plus Fund(G) |
51,383,966 |
51.75% |
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HDFC Equity Fund(G) |
54,700,886 |
66.29% |
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HDFC Growth Fund(G) |
51,045,607 |
50.27% |
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ICICI Pru Dynamic Plan-Reg(G) |
52,141,994 |
55.07% |
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Kotak Opportunities Fund(G) |
50,674,289 |
48.64% |
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L&T India Spl.Situations Fund(G) |
52,332,773 |
55.91% |
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Morgan Stanley Growth Fund-Reg(G) |
48,241,189 |
37.98% |
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Reliance Equity Opportunities Fund(G) |
53,392,713 |
60.56% |
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Reliance Growth Fund(G) |
53,636,586 |
61.62% |
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Reliance Reg Savings Fund-Equity Plan(G) |
52,379,956 |
56.12% |
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Reliance Top 200 Fund(G) |
52,467,303 |
56.50% |
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Reliance Vision Fund(G) |
53,607,345 |
61.50% |
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SBI Contra Fund-Reg(G) |
49,638,474 |
44.10% |
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SBI Magnum Multiplier Plus’93-Reg(G) |
52,011,174 |
54.50% |
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Templeton India Equity Income Fund(G) |
49,998,763 |
45.68% |
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Nifty |
49,599,714 |
43.93% |
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Vivekam Products |
60,328,821 |
90.95% |
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Vivekam’s performance has always been ahead of all mutual funds in the country for the past five months. The second position is seen to be moving from one mutual fund to other in the past five months. This shows that an average investor is unlikely to be successful in spotting the best mutual fund for his investment needs. Further, it is even more unlikely that he would put all his money in that mutual fund to reap higher profits. Interestingly, nifty has returned a return of 43.73% for the period under coverage falling way behind the mutual funds covered in the table above.
The continued success of Vivekam’s products goes on to prove that a process driven investment mechanism outperforms emotion driven investments on most occasions. Passive investments recommended by a few experts (aka index ETF’s) may be able to beat majority of the ill managed mutual funds but not a well-defined, process driven and emotionless investment strategies (called products by Vivekam). Work at Vivekam will never stop and we continue striving to improve the functioning of the processes and fine tuning the strategies to help investors have peace of mind at all times. With a few more products set to roll out from Vivekam, retail investors would say “Investments have never been so easy”.
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