The multiplier portfolio is a concentrated yet well-diversified portfolio of midcaps and small-caps. These are stocks that are likely to be winners of tomorrow, and hence hold the promise of significant wealth creation in the times to come. Read more to find out about this portfolio.
Small and Midcap stocks have lately shown a strong resurgence in performance and there has been a renewed focus on them. However, they are quite tricky to pick and require a lot of patience and persistence to stick to as they are generally prone to volatility. History has shown that a small portion of these mid and small-cap companies will eventually multiply and grow quickly and with a strong budget, and the current state of the economy – it brings strong opportunities for our subscribers.
Quick 101 on the Multiplier Portfolio
Portfolio Construction: ~15-20 Small and MidCap stocks, typically equal-weighted
Size: Small companies and MidCap Companies
Time Horizon: 3-5 year target holding period (like Teji Mandi Flagship)
Philosophy:
Extremely picky. Businesses must still meet our rigorous investment checklist. See the reasons below
- Capital Allocation: We look for companies with a superior track record of capital allocation. Excellent corporate governance and capital allocation track record and strong sustainable competitive advantages ensure that we identify winners.
- Low coverage of mid and small-caps: Analyst coverage of mid and small-cap stocks is much lower than large caps. This gives the fund manager an edge in spotting good businesses early and generating higher alpha.
- Favourable cyclical upturn: Small and midcaps tend to perform in extremes and revive sharply after bouts of negative returns. After the correction in small caps in the last 3 years, we expect a significant revival in performance
Other Facts
- Minimum Investment: This strategy is much more long-term for us, but we have kept the minimum investment low – starting at just Rs 20,000.
- SIP: We suggest a monthly or quarterly SIP in this to truly take advantage of our allocations.
- Fee: Rs 1497 for three months, Rs 2394 for six months or Rs 3588 for twelve months.
- Rebalance Frequency: While there is no set rebalance frequency, we ensure that the stocks continue to meet the above criteria. If we feel there is a better opportunity available and suits our portfolio allocation, we will execute a rebalance.
Have any questions about this portfolio? Reach Us at [email protected].
