Whether you are a novice investor or a veteran, the diversification mantra works for all. Diversification helps smart investors invest in stocks of different market caps, themes, and sectors and insulate their portfolios from the ups and downs of the market. But with so many stocks in the market, investors find it challenging to rebalance their portfolio at regular intervals as per their risk assertiveness.
To cater to such needs of modern investors, various financial products have been launched in the market in the past few years. But none has been more popular and successful than smallcases.
What are smallcases?
Smallcases are baskets of stocks or ETFs (exchange-traded funds) based on the investment plan, theme, idea, and strategy. Through a Demat and trading account from one of the many brokerage houses, investors can analyze various smallcases and invest in the basket of funds that best suits their needs.
Who manages smallcases?
Smallcases are structured by SEBI Registered professionals who curate and shortlist components in every basket based on rigorous proprietary filters. With over 250 smallcases available, finding the best smallcase is like finding a needle in a haystack. You must consider the theme, strategy, volatility, minimum amount, free or premium (fee-based), etc. before you finalize the smallcase.
For premium smallcases, a fee is charged by managers to view constituents of the basket and invest in them. These smallcases are actively managed, with the approach to beat the market and generate great returns. Investors can still access and invest in free access smallcases without any charges. However, the returns generated remain moderate.
Considering all the factors, here are some of the best smallcases of 2022 for investors to consider:
- Top 100 stocks: This basket captures India’s powerful companies, offering better stability. It includes large-cap companies with lesser volatility and is the best choice for long-term wealth creation. In the past three years, the smallcase has given a 21.45% annual return on a minimum investment of Rs. 1,227.
- All-weather investing: This smallcase is best for investors who prefer steady returns, no matter whether the market is up or down. Investment is divided into three asset classes: equity, debt, and gold, periodically rebalanced depending on the market situation. The basket has given 13.59% annually in three years with a minimum investment of Rs. 3,451.
- Teji Mandi Flagship : This smallcase is known to provide index-beating premium stock advisory and education to its investors. The stocks are shortlisted from NIFTY 500, which provide adequate liquidity and combine short-term and long-term investment views. The portfolio is structured to give investors benefits from stocks in a 12–18-month timeframe. Teji Mandi has strong investment values and usually exit their stakes in stocks if:
- Company or industry fundamentals start changing.
- Too much negativity surrounds a company.
- An extreme macroeconomic/market situation occurs.
In some instances, they exit volatile markets and hold some percentage of the portfolio in stable liquid ETFs such as ‘liquid bees’. Teji Mandi Flagship has given 80.36% CAGR in the past year with a minimum investment of Rs. 23,259.
- Multiplier: This is a concentrated yet well-diversified portfolio of midcap and small-cap stocks. The basket is ideal for investors who want to generate significant wealth over a long horizon. Benefits of this portfolio are:
- Allocation of capital: Teji Mandi invests in companies that have a great track record of capital allocation, excellent corporate governance, and strong, sustainable competitive advantage.
- Hidden diamonds mid- and small-caps: Analysts usually cover the popular ones in a sea of mid and large-cap stocks. Fund managers at Teji Mandi unearth these hidden gems that have great business potential and can generate higher alpha over time.
- Favorable cyclical upturn: The performance of small- and mid-caps stocks is cyclical. These stocks have remained uneventful in the past three years and are poised to climb higher in charts as the market revives. In just eight months, this portfolio has given 82.06% returns in 2021 on a minimum investment of Rs. 42,562.
If you want to invest in smallcase but are not sure how it works or from where to start, visit Teji Mandi, a SEBI-registered investment advisor and a subsidiary of Motilal Oswal Financial Services. Our premium smallcases have generated exceptional returns in the past year and have been far ahead of our peers. Contact us today for any queries on smallcases and guidance from our seasoned investment advisors on achieving your financial freedom objectives.