Live Portfolio

September 2021

Hi there!

We’re back with another feature of giving you a real insight into the thinking process that goes behind key investment decisions. And so, by sharing our real portfolios with you, we want to give you a sneak peek into the kind of strategies that we create and deploy. This time we are taking you through a Live Folio.

Live Folio highlights the investor’s personal journey and breaks down his challenges in investing. This will act as a mirror for you as you will relate to some of his instincts and understand how we have helped him achieve better results. The idea of sharing a real portfolio stemmed from the notion that every portfolio that we build and deploy is a reflection of its holder. This portfolio is not supposed to be best performing or perfectly risk modulated but is simply authentic. It resembles the investor’s appetite and how our strategies have played out for him.

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.

As it goes without saying, the names of all our investors have been changed for confidentiality reasons.

We’d like to discuss Mr. Amit Taneja’s Portfolio today. Here’s a brief investor profile :

• Mr. Taneja is a 35-year-old professional in tech and works at a well-known MNC in Delhi.
• Amit started out as a DIY (Do-it-Yourself) investor, by taking advice from his father and simultaneously learning from online resources such as Youtube, moneycontrol etc.
• However, it became increasingly difficult for him to manage his finances with his hectic work schedule and limited time that he could spend on research.
• Prior to investing with Cambridge Wealth, Amit was dissatisfied with the rate of growth on his investments as compared to the index.
• Amit plans to retire by 55 thus giving him a 20-year horizon. Some of his Financial goals include a Travel Fund, Retirement Corpus, & an emergency fund that gives him the flexibility to liquidate money in case of any unexpected expenditures.

Portfolio Blueprint

• Keeping Amit’s goals in mind, it is clear that some portion of his portfolio needs to be allocated to debt strategies that aid in creating his Emergency fund. Investing in fixed income instruments which include short to medium term accrual strategies juxtaposed with high-quality roll down strategies, makes sense.
• As far as his Retirement is concerned, a major portion of the folio is parked in Equities which is diversified across high quality small & multi-cap funds.
• With the sharp run-up in Mid and Small-cap indices, current valuations are not extremely expensive but have reduced the risk to reward ratio. Value strategies provide a favourable risk-reward at this point with potential alpha generation from Multi caps, however only in a staggered, risk-managed way via STP over the next 12–18 months.
• For someone like Amit who desires a more sustainable quality portfolio, about ~60% — 70% of the Equity portfolio should be biased towards Equity products with strong fundamentals, consistency and decent risk metrics which would act as compounders over the long run.
• A 75–25, Equity — Debt allocation is suited for such an individual which gives the dual benefit of significant alpha creation over the next 5 years with some liquidity to provide stability to the portfolio and fulfil any urgent cash requirements.

Here’s a quick look at how Amit’s portfolio performed over the last 5 years:

Mr. Taneja’s Folio

What do we see moving ahead? (Investment Outlook)

• With equities at all-time highs, it is very likely for a correction to take place someday, but whether that happens tomorrow or after a year, there’s no way of ascertaining this. Tactics like predicting a correction period or start booking profits early usually never pan out the way you want them to and so, we tend to stay away from them as well.
• The secret to avoiding the emotional trap of crumbling patience when markets are not rewarding and even capital starts eroding is long term investment orientation. With solid fundamentals like strong fiscal position, corporate balance sheet etc. things seem to be on a better India’s decade. Serious wealth could be created in many sectors.
• Excluding the last 1.5 years or so, the Fed rate and equity markets have mostly moved in the same direction. The Fed generally increases rates when the economy is improving and inflation is on an upward trajectory. A mix of middling inflation and a robust economy generally provides a good boost to corporate profitability and in turn, equity markets.
• All the four pillars (domestic consumers, private corporations, government and exports) of our economy look like they are in good condition given the recent covid impact, which works well for corporate growth.
• What works best in such scenarios is to balance your risk-reward by selecting high-quality equities in a disciplined manner, over the next 12–18 months in a way that does not expose you to all of the market shocks while exposing you to market opportunities, this is what we are going to do in our Live Folios as well.

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.