The Performance at Capitalmind Wealth — 1.5 years since we launched

The PMS completed an year in Nov’18, and here are our monthly results since inception. These are the numbers we report to SEBI every month.

The methodology used is the weighted average performance of all clients. This means a bigger client has more weight than a smaller one and a client who joins towards the end of a month has less impact (for that month) than someone who joins earlier in the month.

Monthly Returns

The Performance in context

Markets have been crazy. Our portfolio isn’t exactly like the Nifty (more mid and small caps) so it’s not something we will beat in the short term (or plan to). However for the more comparable indexes — Nifty midcap 100 or such — things are a bit different and we have done better with our strategy. Also, till Sept’18, the debt allocation has saved us from a steeper fall.

We didn’t ride that much of the rise earlier in 2018, and haven’t seen that much of a fall.

Long Term Matters

We don’t like to look shorter term here, and will have different portfolios for that as a goal. The idea was :

If the market falls, we’ll allocate more to equity
The market has fallen quite a bit
We expect to allocate a lot more to equity as the market finds its feet.

In the longer term, many stocks that have fallen a lot are likely to turn around. Look at the biggest winner in the last 15 years: Maruti. It’s gone from a value of 160 to more than 6,500 today (adjusted for splits/bonuses) which is a 40x return. But look at how much it fell each year from it’s peak to subsequent trough — we call it the maximum draw-down:

As you can see, you should easily accept 30% draw-downs in even the best of stocks. Our portfolio is no different — and we have severely under-performing stocks and relatively better ones. We believe we will continue to buy more of the good stocks, and get rid of the bad ones.

The portfolio is built for growth so there will be large draw-downs as well. Our core strategy still remains to identify and participate in good growth stories over the next decade. We strongly believe that our portfolios will do excellently in the long term, even if they don’t exactly match the indices in the short term.