SEBI (Research Analyst) Registration Number: INH200004471


15 October 2017

Q2FY18: Portfolio Performance


In this post, we highlight the performance of the portfolio for the quarter ended 30th September, 2017. We document our portfolio performance on a quarterly basis for the benefit of our readers and those who are interested in knowing the performance of our advisory service.
This post focuses solely on the performance of stocks and not the company results. To see the fundamental performance of our invested companies, read: Performance of invested companies

Performance


Compared to a stellar Q1FY18 performance of 15.12% returns, Q2FY18 was rather modest with a 6.72% return. This is a good number for a quarter performance. Our portfolio outperformed the Nifty50 by 3.02% this quarter.

As we write this post, our portfolio has crossed its previous high and is at its highest NAV since inception

We are satisfied with the performance when we look at it from a risk adjusted basis. Our client portfolios have heavy cash deployed in liquid funds as we await further investment opportunities. The cash also acts as a cushion in times of immense short term volatility. This quarter saw a little bit of volatility but there was no decent correction in the broader markets at all. A graph of our portfolio performance is shared below.

To read our Q1FY18 performance, click here.

Portfolio

This month saw some new additions in the portfolio and also some profit booking. We increased our portfolio allocation in one of our branded jewellery investment. This company has appreciated by 640% since our recommendation is 2014 and we expect it to do good over the next few years.
Further, we have added a new company to our portfolio with a 7% allocation. This company has outperformed its peers during tough times and has decent growth numbers and margin stability coupled with high return ratios which makes it a good investment for the long term.
Shakti Pumps was a perfect turnaround investment when we invested a couple of years back. Noone believed in the company and its bad business model and when it crossed Rs 500, we had PMS managers, fund managers, advisory firms all chasing to get their hands on it. We have however reduced our exposure to Shakti Pumps as the current valuations are commanding a significant risk premium over the expected returns. Shakti pumps has appreciated by nearly 400% in 2 years since our recommendation.

The above chart shows the breakup of the equity allocation only. We have 12 stocks in the portfolio with varying allocation and a debt-equity split which offers new clients an opportunity to invest over a period of time rather than all at once.