Founder’s Portfolio

October 2021

Hi there! This is Chinmay Kulkarni, CEO and Founder of Cambridge Wealth and we’re back with a monthly update on our Founder’s Folio (My portfolio!). Founder’s Folio is our way of giving you a real insight into the thinking process that goes behind key investment decisions. The idea of putting out my portfolio stemmed from the fact that trust & transparency is a huge issue today. Not many are comfortable with practising what they preach. And so, by putting out a Real portfolio, we want to give you a sneak peek into the kind of strategies that we create and deploy. In short, put our money where our mouth is. Please note that in investments one size does not fit all, our algorithms and counsellors help you discover the right options and understand the right quality for your investment journey.

If you missed out on the first feature, catch all the action here.

Portfolio Blueprint

• I have always been bullish on India’s growth story for the last 2 decades and continue to remain so. What’s not to like? The top 1000 profitable companies have witnessed their profit pool increase to INR 10.8 trillion which puts us amongst the top-performing markets globally.
• The fact that the equity market rally, over the last year and last 6 months especially, has been led by strong corporate earnings growth is a positive indicator but then again, it’s not all sunshine and rainbows. Looking at the all-time high valuations amongst Mid and Small-cap indices recently, current valuations are not extremely expensive but have definitely reduced the risk to reward ratio.

• While the recent Inflows in Equity MFs have been encouraging, it looks as if much of it is attributed to the current rally. The problem? These levels are too volatile and more importantly, unsustainable. So those investing directly in Equities are probably entering at peak valuations, exposing themselves to high downside risk
• Keeping this in mind, our strategies have always had a blend of forward-looking plus reflection on past mistakes. There may not be a repeat of the 2008 GFC episode, but we’re still moving ahead in a staggered manner managing risk in the most optimal way (that we know of) as possible. Dollar-cost averaging could not be any more relevant in such times!

Founder’s Folio:

To give you a better idea, here’s a brief summary of the strategies that I currently hold in my Portfolio. You can also find a comparison of how this folio has performed against the traditional benchmarks over the last 5 years as given below.

Investment Outlook: What do we see moving ahead?

• There has been a steady Run up, especially in small and Midcap indices with the Relative Strength Index (RSI) for the Nifty Midcap being pegged at 79.3, which indicates that the shares listed in this index have been overbought and may show some pullback in the foreseeable future. This basically means that most investors are rushing to discover value in the Mid and small-cap stocks due to their significant outperformance against large caps over the last 24 months
• If you take a closer look at the current fundamentals, historical data suggests that there may be a correction in the next 36 months during which, you may see some volatility in your portfolio ranging between 12–24%.To mitigate downside risk in your portfolio, you may consider moving into equities slowly and steadily over the next 12–18 months via STPs. We will see more volatility in global (including China) markets after a significant run-up over the past 18 months. This aims at bringing down the overall risk in your portfolio and spreads it across various Market Cycles.
• In the meantime, we continue to remain invested in our current investment options backed by strong fundamental growth over the next 3–5 years. However, as long as there is a structural investment case, we will remain disciplined investors and avoid taking any unnecessary risks on our portfolios amidst the current rally in markets.

Disclaimer: The information, data or analysis does not constitute investment advice or as an offer or solicitation of an offer to purchase or subscribe for any investment or a recommendation and is meant for your personal information only and suggests a proposition which does not guarantee any returns. Baker Street Fintech Pvt. Ltd (hereinafter referred to as BSFL) or any of its affiliates is not soliciting any action based upon it. This information, including the data, or analysis provided herein is neither intended to aid in decision making for legal, financial or other consulting questions nor should it be the basis of any investment or other decisions. BSFL does not take responsibility for authentication of any data or information which has been furnished by you, the entity offering the product, or any other third party which furnishes the data or information. The above-mentioned assets are not necessarily maintained or kept in the custody of BSFL. The benchmarking shown in the document above is a result of the choice of benchmark BSFL uses for the various products. The above data, information or analysis is shared at the request of the recipient and is meant for information purposes only and is not an official confirmation of any transactions mentioned in the document above. BSFL reserves the right to rectify discrepancies in this document, at any point in time.