Handling assets is no longer forte of only Mutual Funds!
Vivekam’s processes pipped Nifty in performance.
Vivekam beats 255 of 270 mutual funds in performance.
Compared to MF with at least 500 Crores of assets, Vivekam stands 6th.
Experts, analysts, seasoned traders, speculators, retail investors and fund managers have all got a role to play in stock market. Smartness of participants is measured by the return they could earn on their investment over a period of time. There will be claims and counter claims from participants declaring that they have managed to earn a higher return than most others in a select period of time.
Before one concludes that the ability of a participant is exemplary, one must be able to judge the performance over a longer period of time with several points of interaction with markets. That is to say, for a person to be accepted as an intelligent investor, he should have possessed the qualities of earning more than index for most investors or on most investments even though they happen at different periods of time during the period under coverage.
If we wish to analyse the performance of fund manager for a period of three years, it is ideal to have a case where investments have been made at different periods of time during this three years. If the net return earned on all investments put together is more than what could have been the case if the investments are made in index, then we may accept the intelligence of fund manager. Otherwise, at times an investment made at a particular time may have yielded spectacular returns than index and could lead us to believe that he possessed extraordinary qualities as a fund manager.
In this backdrop, Vivekam attempted to analyse the performance of its processes by adopting a broader methodology. Several investors have been using different products offered by Vivekam for investments over the last two years. The first of such investments was made on 22 August 2011 followed by over 300 instances of investments on different dates. Though the products opted by the clients varied from person to person, if our processes were effective, the combined value of investments as on today should be more than what it could have grown into if the clients invested those amounts in index.
Vivekam is proud to declare that the combined value of investments made by clients, in over 300 dates at different points of time in the two year period, is higher than the index equivalent. Mutual funds who take investors money into their custody and invest on their behalf have this kind of situation where fresh investments or withdrawals happen any time during a year. The fund manager will have no control on investments flowing in or amounts being withdrawn. Therefore it may be relevant to assess the efficacy of mutual funds, versus index and with the performance of Vivekam’s processes to judge which is better.
If we take the absolute change in index value from a date when the first investment ever was made in any of the products of Vivekam and ending on 19 December 2013, it worked out to be 25.88% positive. When we checked in all equity mutual funds (excluding sector funds and index funds which are strictly not comparable) the maximum return earned by the best three mutual funds for this period stood at. 17.02%, 16.83% and 16.42%. Just because mutual funds did not manage to match up the performance of broad-based nifty in this two year period, the ability of fund managers should not be discounted unless they are found deficient when we check their performance with multiple investment dates with variable amounts of investments.
To lay a level playing field between Vivekam and the mutual funds under comparison, we presumed that the investors have invested similar amounts on the same dates in those mutual funds based on their NAV on those dates.
Then we went ahead to compare the final value of investments as on December 20, 2013. Out of 270 odd mutual fund schemes that are diverse equity funds (excluding sector funds and index funds) which are open ended, Vivekam’s performance has been exemplary by being in the top 15 funds. When we compared the performance of Vivekam’s products with that of mutual funds who had a corpus of more than Rs. 500 crores, Vivekam stood in 6th position.
For retail investor the options available are to select one of the 270 schemes and hope for the best or go with Vivekam’s products which are always on the top 10% of the mutual funds, in terms of performance with respect to return on investments. When you are with Vivekam, unlike any other mutual fund or portfolio management schemes, your investments will always be with you. Vivekam’s duty is to help you invest in underpriced growth stocks at an appropriate time and to alert you when the exit is required. There will not be any lock in period and you will have access to your stocks all the time.