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    Mid and Small Cap Model Portfolio: Objective Strategy

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    Prachi Patwari
    The document describes a mid and small cap model portfolio that aims to create long-term wealth by investing in high growth Indian companies across the mid and small cap spectrum. It utilizes fundamental bottom-up research to identify companies with improving fundamentals and tactically allocates weights across sub-classes to achieve positive returns while managing risk. The portfolio targets 20-30 stocks that are diversified across sectors and market caps within established allocation limits.

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    Mid and Small Cap Model Portfolio: Objective Strategy

    Uploaded by

    Prachi Patwari
    73 views3 pages
    The document describes a mid and small cap model portfolio that aims to create long-term wealth by investing in high growth Indian companies across the mid and small cap spectrum. It utilizes fundamental bottom-up research to identify companies with improving fundamentals and tactically allocates weights across sub-classes to achieve positive returns while managing risk. The portfolio targets 20-30 stocks that are diversified across sectors and market caps within established allocation limits.

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    MOSL_Product_Note_Mid&SmallCap-Eastwind

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    The document describes a mid and small cap model portfolio that aims to create long-term wealth by investing in high growth Indian companies across the mid and small cap spectrum. It utilizes fundamental bottom-up research to identify companies with improving fundamentals and tactically allocates weights across sub-classes to achieve positive returns while managing risk. The portfolio targets 20-30 stocks that are diversified across sectors and market caps within established allocation limits.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    73 views3 pages

    Mid and Small Cap Model Portfolio: Objective Strategy

    Uploaded by

    Prachi Patwari
    The document describes a mid and small cap model portfolio that aims to create long-term wealth by investing in high growth Indian companies across the mid and small cap spectrum. It utilizes fundamental bottom-up research to identify companies with improving fundamentals and tactically allocates weights across sub-classes to achieve positive returns while managing risk. The portfolio targets 20-30 stocks that are diversified across sectors and market caps within established allocation limits.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 3

    Model Funds

    Mid and Small Cap Model Portfolio 25-Feb-20

    Objective Strategy
    Combining the best of fundamental bottom up research Active investing across capitalization spread of
    with convienience of model fund investing. Mid and investment universe by identifying companies with
    Small Cap Model Portfolio aims at long term wealth improving fundamentals. Tactical weight allocation
    creation by investing in a mix of mid and small cap high under the sub-classes to achieve positive return along
    growth Indian companies. with managing the risk .
    Mid and Small cap investment universe as represented The process will include Fundamental bottom up
    by Nifty Midsmallcap 400 index comprising of 150 mid research: Information mining, financial modeling,
    cap companies and 250 small cap companies building investment thesis, active & rigorous tracking
    for changes in earnings & quality outlook.

    Investment Universe
    According to SEBI, Mid cap companies are defined as companies ranked between 101 and 250 by full market capitalization
    and Small Cap companies are ranked between 251 and 500 by full market capitalization.
    In cyclical upturn of the market, Mid & Small Cap provides higher returnthan the broader Index
    Bull Years Returns % 2007 2009 2014 2017
    Nifty Midsmallcap 400 82% 112% 63% 55%
    Nifty 50 55% 76% 31% 29%
    The NIFTY Midsmallcap 400 reflects the performance of a portfolio of 150 mid cap and 250 small cap companies listed on
    NSE.Nifty Midsmallcap 400 comprises of 74% weights in Mid Cap companies and 26% weights in small cap companies. 26%
    in small cap can provide large alpha while more established mid caps provide downside protection
    While Nifty has high level of stock concentration, Nifty Midsmallcap 400 is far more diversified. The Top 10 stocks in
    Midsmallcap 400 have 12.22% weight vs 60.85 % weight of top 10 stocks in Nifty.

    Credentials
    Research team advising this model portfolio has experience of successfully managing model portfolios for more than 10
    years.
    The flagship model portfolio has delivered 17.2% CAGR over the last 10 years Vs 8.8% CAGR of
    NSE 500
    ● Consistent application of growth in value philosophy has ensured consistent outperformane of the model fund managed by
    the team.
    ● Uniquely designed risk management framework ensures superior risk adjusted returns as exihibited by high sharpe of
    various portfolios under administration

    The model can be tracked using a minimum of INR 5.0 lakhs and in multiple of INR 50,000 thereafter. Stocks have continuous high liquidity
    Model Funds
    Mid and Small Cap Model Portfolio 25-Feb-20

    Mid and Small Cap Model Portfolio- Allocation Strategy

    Stock Strategy
    ● Maximum Weight on any stock will be +7% of it’s weight in the benchmark
    ● The portfolio will consist of 20-30 stocks to provide superior returns

    Capitalization Strategy
    Weight% Large cap Mid cap Small Cap
    Max 0% 80% 50%
    Min 0% 50% 20%

    Sector Strategy
    ● +/(-) 12% of Index weight.
    Nifty 500 has following sector distribution
    Sector Wt% Sector Wt%
    Industrials 35% Global 11%
    Consumers 30% Cyclicals 3%
    Credit 21%

    Fundamental Characteristics
    > Quality- Companies with improving return ratios
    > Growth- Companies with above average growth than peers
    > Valuation- Margin of safety for out-performance in 2-3 years

    Research Process
    The stock selection process follows a rigorous bottom up research blended with the Top down Approach- of understanding the changes
    and opportunities in the addressable market of the company and Bottom Up Approach - by building a detailed business & financial model to
    deep dive into outlook on the company Financials, Management strategy and State of the addressable market and identifying the changing
    dynamics of that addressable market along with deciphering Sustainable Valuation .
    Model Funds
    Mid and Small Cap Model Portfolio 25-Feb-20

    Mid and Small Cap Model Portfolio- Allocation


    Full Portfolio Cap Allocation
    Stock Cap Sector Industry Wtg (%) Model Fund
    Cap Index Wt%
    VMART Small Cap Consumers Consumer Disc. 6% Wt %
    APLLTD Mid Cap Global Health Care 6% Hi Cap 0% 0%
    PVR Mid Cap Consumers Media 5% Mid Cap 73% 57%
    APOLLOHOSP Mid Cap Consumers Health Care 5% Small Cap 27% 43%
    INDIAMART Small Cap Consumers Industrials 5%
    CREDITACC Mid Cap Financials Financials 5%
    UJJIVANSFB Mid Cap Financials Private banks 5% Sector Allocation
    NAM-INDIA Mid Cap Financials Financials 5% Sector Index Wt% Model Fund
    CANFINHOME Small Cap Financials Financials 5% Wt %
    GUJGASLTD Mid Cap Industrial Utilities 5% Industrial 35% 28%
    NESCO Small Cap Industrial Const. & Engg. 5% Consumers 30% 33%
    TATAELXSI Small Cap Global IT 4% Financials 21% 29%
    ZYDUSWELL Mid Cap Consumers Consumer Staples 3% Global 11% 10%
    LALPATHLAB Mid Cap Consumers Health Care 3% Cyclicals 3% 0%
    KAJARIACER Mid Cap Industrial Cons. Materials 3%
    DIXON Small Cap Consumers Consumer Disc. 3%
    CEATLTD Small Cap Consumers Auto Components 3% Market Cap Representation
    CHOLAFIN Mid Cap Financials Financials 3% Stock’s Market Cap Index- Full Model Fund-
    MCX Small Cap Financials Financials 3% Mkt Cap (Rs Full Mkt Cap
    Cr) (Rs Cr)
    KEC Mid Cap Industrial Const. & Engg. 3%
    ABB Mid Cap Industrial Industrials 3% Highest 36,799 26,953
    FEDERALBNK Mid Cap Financials Private banks 3% Lowest 178 739
    RITES Small Cap Industrial Const. & Engg. 3% Average 8,837 11,186
    TCIEXP Small Cap Industrial Industrials 3%
    MOLDTKPAC Small Cap Industrial Industrials 3%
    25%
    20% Industry Allocation
    Index Wt%
    15%
    10% Model Fund Wt %

    5%
    0%

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