Stay the Course with Equities. Volatility isn’t the Time to Sell.
Success in a single attempt cannot help emerge one to be a winner in investment world. For any investor to stay ahead in his investments, he must continue to be successful in as many cases as possible. Vivekam’s investment strategies called PRODUCTA have been offered to the investing community from January 2013. However close friends and associates of Vivekam’s team started testing Vivekam’s investment products from a time much before 2013.
In the last two years and eight months of investing experience, Vivekam is proud to announce that it retained its leadership position among the top 20 mutual funds (diversified equity funds with a corpus of more than 500 crores). When we ran a similar test after the end of December 2013, the performance of investments made through Vivekam’s products had beaten all the mutual funds in the country by a clear margin.
For companies like Vivekam who provide investment advice, the clients may come from HNI segment or retail investors. Since mutual funds are often described as the best medium for retail investors, Vivekam picked up investments from only retail investors to compare with alternate investment avenues available to them for this article. The period under coverage started from as early as August 2011 to end on 31st March 2014. In this 2 years and 8 months, retail investors have invested money on 435 different days through different products. The range of individual investment varied from Rs 4,000 to Rs 10,00,000. The total investment this far from retail investors into Vivekam’s products stood at Rs 2,72,53,000 (Rupees two crores seventy two lacs and fifty three thousand).
After the end of first quarter in 2014, Vivekam undertook the exercise of comparing the performance of its products vis-a-vis top 20 diversified equity mutual fund schemes. Retaining its leadership position in terms of returns offered on investments, Vivekam’s products have earned an average return of 32.86% versus 28.68% earned by the closest competing mutual fund scheme. The findings of the analysis are presented in the table below along with the returns offered under different mutual fund schemes.
|
Birla SL Dividend Yield Plus(G) |
30,946,516 |
19.48% |
|
Birla SL Equity Fund(G) |
32,393,733 |
27.11% |
|
DSPBR Equity Fund-Reg(G) |
30,700,622 |
18.18% |
|
Franklin India Flexi Cap Fund(G) |
32,036,902 |
25.23% |
|
Franklin India High Growth Cos Fund(G) |
32,519,564 |
27.78% |
|
Franklin India Prima Plus Fund(G) |
31,792,987 |
23.94% |
|
HDFC Equity Fund(G) |
32,211,888 |
26.15% |
|
HDFC Growth Fund(G) |
30,347,422 |
16.32% |
|
ICICI Pru Dynamic Plan-Reg(G) |
32,691,806 |
28.68% |
|
Kotak Opportunities Fund(G) |
30,813,649 |
18.78% |
|
L&T India Spl.Situations Fund(G) |
31,620,647 |
23.04% |
|
Morgan Stanley Growth Fund-Reg(G) |
30,685,084 |
18.10% |
|
Reliance Equity Opportunities Fund(G) |
32,235,078 |
26.28% |
|
Reliance Growth Fund(G) |
30,348,898 |
16.33% |
|
Reliance Reg Savings Fund-Equity Plan(G) |
30,575,348 |
17.52% |
|
Reliance Top 200 Fund(G) |
31,861,789 |
24.31% |
|
Reliance Vision Fund(G) |
31,950,111 |
24.77% |
|
SBI Contra Fund-Reg(G) |
30,335,093 |
16.26% |
|
SBI Magnum Multiplier Plus’93-Reg(G) |
32,003,512 |
25.05% |
|
Templeton India Equity Income Fund(G) |
29,870,575 |
13.81% |
|
Nifty |
30,942,224 |
19.46% |
|
Vivekam Products |
33,482,563 |
32.86% |
It is indeed heartening to note that Vivekam retained its leadership position backed by solid processes and scientific approach in investments. We deem it as an endorsement of our stated philosophy “INVESTMENT IS A SCIENCE, AND NOT AN ART“. We thank all our clients for reposing trust in our system and our approach to investments.
In our interactions with our clients, we learnt that they had some special reasons to opt Vivekam’s products over mutual fund schemes. We attempted to categorise their observations and present them below for the benefit of entire investing community.
Diversification of mutual fund investments:
In real life situations, investors mostly spread their investments across multiple mutual fund schemes. They do so with a hope to diversify and be able to avoid undue risk of concentration in one mutual fund. Given this backdrop, it is highly unlikely that the entire mutual fund investment of any investor is made in the best of the funds. This implies that the average return enjoyed by most retail investors from their investment in mutual funds schemes will be far below the maximum reported by the best mutual fund.
Rationale behind investments never communicated:
Unlike with Vivekam where each and every investment or divestment decisions are explained with logic, mutual fund investors will never be offered any explanation for entry and exit of stocks by mutual fund managers. In fact, they are never communicated on what is being bought or sold. Instead they only announce the portfolio holdings at the end of each month.
Asset management charges are applied irrespective of performance:
Charges levied by AMCs or asset management companies will not be in proportion to the returns earned on mutual fund investments. Underperformance or outperformance over index may not necessarily result in lower or higher charges. With Vivekam, majority of the fees is linked to outperformance over index and hence investors feel comfortable.
Entry and exit of large investors:
When a large investor exits mutual fund scheme, majority of the portfolio of the fund may have to be sold pulling down the values of stocks and thereby impacting the NAV of the fund scheme. This results in lower realisations for the continuing investors. Entry of large investor may also have ill effects on the other mutual fund investors. However, at Vivekam, portfolios of all individual investors are tracked independent of each other and hence will not suffer from this limitation at any point of time.
Transparency in portfolios throughout the year:
Investors in Vivekam’s products are always updated on their current portfolio holdings. By a simple login, investors would be able to see their status of portfolio and also the target prices for the stocks being held on. As soon as the results of any portfolio stock are announced, Vivekam undertakes the exercise of reviewing and updating the target price immediately. Because of this transparency in processes, investors will always be able to learn the latest about each and every stock in their portfolio.
The strong show reported by Vivekam’s products and the surge in number of clients for Vivekam’s products has only increased our responsibility to be attentive to the requirements of investors. We strive very hard to continue the spirit of simplifying investment process by inducting scientific approach. With the encouragement received from retail investors and interests shown by large to very large investors in our products, we hope to stay ahead of the rest for a long time to come.
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