Ever since we launched our stock recommendation service a year ago, a persistent enquiry from our customers has been about if and when we are going to launch our smallcase portfolio.
It was a good question, and at long last, we have a good answer – the time is now.
We have just launched two portfolios on the smallcase platform – an active-investing stock portfolio with a unique, growth-oriented theme, and a passive-investing portfolio but one that is dynamically managed by us.
Both these portfolios are available immediately for subscription in the smallcase platform.
Before we go into the details of these two portfolios, let’s answer a primary question first.
Why smallcase?
First, for those who are unaware, smallcase is a platform that enables investors to invest in ‘baskets’ of stocks and/or ETFs. These baskets could be theme-based, sector-specific, or may be driven by an investment strategy. Investors can choose the portfolio that they are interested in and, using the brokerage gateway facilities built into the platform, directly invest in the entire portfolio in a single shot. Subsequently, rebalancing of these portfolios are regularly communicated to subscribers/investors and implementing these recommendations can be done with a single click.
You can find more information about smallcase investing here.
The main reason that we decided to partner with smallcase was that it has made informed stock investing easy for investors – a mission that we care about deeply as well. In India, there have been path breaking brokerages like Zerodha that have sorted out the twin problems of ease of execution and cost of trading in the markets, but they have not solved the more fundamental problem of where to invest.
The smallcase platform is solving this problem with its unique marketplace approach. By creating a platform where market researchers can ‘sell’ their investment ideas to customers, and by making it simple and easy for investors to execute upon these ideas, they are solving both the supply and demand sides of the problem.
For investors what this means is that market research becomes not just accessible but also immediately actionable. It is truly an end-to-end solution, and smallcase is the first and leading platform in India that does this. Hence our partnership with them.
Two portfolios
As I said earlier, we have launched two portfolios on smallcase – one ETF portfolio and a direct stock portfolio. The reason that we did so was simple – we have two subscription plans in PrimeInvestor – the Essentials plan for investors looking for steady growth and a Growth plan for more active and aggressive investors. We wanted a portfolio that would suit each of these groups of subscribers.
ETF Portfolio
There are several ETF portfolios available in smallcase today – but if you look at them, most if not all are simple collections of ETFs that go barely beyond covering the market. We wanted to go beyond that and create a comprehensive, multi-faceted portfolio of passive instruments. In effect, as our tagline for this product says, we wanted to create ‘one ETF portfolio to rule them all’.
The way we did it was to use the time-tested portfolio design approach of a core and satellite principle. Using this approach, we created a portfolio that has a steady and solid core set of ETFs that is augmented by a more dynamic ‘satellite’ set that behaves more tactically. This is a unique approach to build a core and satellite portfolio. As we remark in our essay about this portfolio,
“A Core & Satellite approach to investing typically uses passive funds for the core and active funds to build the satellite. But we’re turning this long standing concept on its head! With a growing universe of differentiated ETFs, it’s perfectly possible to build a satellite portfolio using just ETFs. So, our PrimeInvestor Core & Satellite ETF smallcase portfolio takes advantage of the low-cost and ever-expanding range of ETFs to build a great, all-weather portfolio.”
We have back-tested our portfolio design and found that this approach outperformed Nifty 50 99.50% of times based on 3-year rolling returns!
Which means you could take lesser risk than investing in active funds and still manage to outperform the Nifty index – that is huge!
Please read our detailed article on our PrimeInvestor Core and Satellite ETF smallcase for more details on this portfolio.
Financial disruptors portfolio
For more aggressive and risk-seeking investors, we have an all-stock portfolio that is designed around a promising theme. Financial services is a sector that has been a perennial favorite of thematic investors in the country, and for good reason – it has consistently delivered high, index-beating returns to people who have chosen to invest.
And we decided to take it to the next level – by investing in the future of this sector. The financial disruptors portfolio is made of stocks that are challenging the dominance of traditional banks in this sector. Simply put, we have hand-picked listed companies that are taking away revenues from banks and are poised to continue to do so due to structural changes in the industry that are underway. We also have stocks of companies that enable this disruption. Both the stocks and the proportions have been carefully picked by us – a team that has worked in this sector for a long while and is intimately familiar with the ongoing and upcoming trends.
Again, quoting from the essay we wrote about our PrimeInvestor Financial Disruptors smallcase portfolio:
“This is primarily a growth-oriented portfolio, with stocks being filtered based on high net interest margins, yields on loans, and ROEs. Valuation has been a secondary consideration in this selection. The portfolio intentionally excludes large banks, not because they cannot join the digital revolution, but because they can lose out in the growth race as small finance banks and mid-sized banks with a small base can capitalize faster on a rebounding economy. This portfolio is suitable for aggressive growth-seeking investors willing to take on high stock price volatility”
This portfolio is designed to ride the changes that can shape the future of the financial services sector – and in this light, we’re not placing heavy importance on the stocks’ past performance. The current volatile period that the sector is going through also does serve as a great starting point!
How to subscribe to these smallcase portfolios
You can subscribe to either or both of these portfolios by going to the dedicated PrimeInvestor section in the smallcase platform.
Cost
In keeping with the PrimeInvestor ethos and tradition, we have kept the subscription costs of these portfolios lower than similar comparable portfolios available on the platform.
And, for PrimeInvestor subscribers, there will be a significant discount made available as well! Until the end of this month (February 2022), PrimeInvestor subscribers can avail a 30% discount on the smallcase subscription fees!
| PrimeInvestor smallcase portfolio | Regular price* | PrimeInvestor subscriber price after discount* |
|---|---|---|
| Core and Satellite ETF portfolio – Annual price | Rs 1,200 per year | Rs 840 per year |
| Financial disruptors – quarterly plan | Rs 2,000 per quarter | Rs 1,400 per quarter |
| Financial disruptors – annual plan | Rs 6,000 per year | Rs 4,200 per year |
So, as you can see, we have not only kept the prices low for these great offerings, we are also providing our existing customers with a significant discount to appreciate your support.
Finally…
Offering these smallcase portfolios is a significant milestone for our platform and for our efforts to ensure that good research reaches a lot of investors. We hope you will find these offerings as exciting as we find them, and that you will continue to support us as you always have. And we hope that in a future date, we can offer mutual fund portfolios in a similar manner to you as well.
Happy investing!
