Smallcase
In 2015, three IIT Kharagpur graduates came together to form Smallcase and gave a new direction to how retail investors could put their money in the stock market. The investor wants to develop a portfolio based on different aspects. Smallcases are baskets of stocks curated using different themes or concepts to create a long-term portfolio with possibilities to diversify as per the requirements. There are different Smallcases available today to suit your investment profile.
The types of Smallcases
Smallcase is a basket of stocks/ETFs created based on an individual’s risk appetite. Different smallcases have different ingrained concepts; given below are different types of smallcases.
Trend-themed
Creating a portfolio requires developing a logical approach towards including different combinations of stocks, ETFs, or any other asset class. A trend-themed portfolio places conviction on different trends in the market. Smallcase based on the trend concept requires Rebalancing from time to time with addition and replacement of trend following components.
Examples: TrendlineZ Balanced and Rising Rural Demand
Volatility-themed
Market dynamics keep on shifting, which happens with different stocks traded on stock exchanges. Indian stock exchanges have the same methodologies of operating. Smallcases created using this theme can be further categorized into three types.
1. Low volatility
Smallcases under this theme are preferred by new and risk-averse investors who do not like many swings in their portfolio in a small period. These are constituted of asset classes that have a proven track record of stability and safety. Their smallcase tries to achieve higher with a relatively lower risk profile.
Examples: Bharosa Club Top 150, ICICI Prudential Leaders
2. Medium volatility
High conviction stocks that follow a stable market cycle but have volatile movements often constitute this type of small case. Slight risk-averse investors who wish to increase their return through incremental risk choose this type of smallcase.
Examples: Rising Rural Demands, Dividend Aristocrats
3. High volatility
The smallcases are preferred by seasoned players, who take high risks to earn higher rewards. These smallcases are created using volatile assets. Volatile smallcases need quarterly review and rebalancing. These are created using stocks regarded as undervalued as per expert methods.
Examples: High-Quality Right Price, Growth at a Fair Price
4. Beta-themed
Smallcases created using quantitative investment strategies based on mathematical and statistical concepts. These smallcases use a quantitative approach to extract a favorable rate of return on your investments.
Examples: Quality – Smart Beta, Low Risk – Smart Beta
5. Industry-themed
Smallcases created to cater to a specific industry that investors want to remain invested in. These smallcases constitute assets using a particular industry type if you create an investment portfolio based on that sector only.
Example: Banking Tracker
Different smallcases are essentially stock portfolios that can be bought and sold at any time during market hours. As a result, no smallcase has a lock-in period. You have complete freedom to leave a smallcase at any time. Different smallcases formulate excellent long-term investments.
Features of smallcase
• Stocks are held in your Demat account.
• You do not have to pay an expense ratio.
• You get tax benefits on dividends.
Brokers with whom you can start smallcase investments
• 5paisa
• Angel one
• Axis direct
• HDFC Securities
• Groww
• Kotak Securities
• Upstox
• Zerodha
• Edelweiss
• IIFL Securities
• Motilal Oswal
• TrustLine
Smallcase is a portfolio of stocks/ETFs traded in the market. Though experts create the portfolio, they do not solicit when to Buy Or Sell Any Particular Smallcase. Each investor has to develop his knack towards the concept he chooses to trade. Market dynamics influence volatility from time to time. Different smallcases perform differently during such times. The decision of entry and exit remains with the investor.
Smallcase is a unique way of investment, and the rising trend in active stock market investments and increases in the investor’s knowledge base may soon create a huge market. There are different smallcases available today that suit each investor’s needs.
Teji Mandi offers actively managed Fee-Based Smallcases – Flagship and Multiplier – that cater to your goal-based needs. Gain access to “Affordable PMS” – Start with as low as Rs 99/month for 12 months and embark on your investment journey today.
