Cash-rich managers underperform

 

Cash-rich managers underperform

Rex Cano / Mumbai March 30, 2009, 0:17 IST

 

In one of the sharpest rallies since the launch of Smart Portfolios, the benchmark BSE 200 index soared over 11 per cent. Its net worth appreciated sharply from Rs 5.91 lakh to Rs 6.57 lakh during the week ended March 27.

Buoyancy in the markets, which caught most investors unawares, was due to sustained fund inflows and heavy short-covering owing to the March futures and options expiry.

In contrast to the smart gains in the markets, our fund managers mainly the cash-rich ones - Amar Ambani and Anand Agarwal - under-performed the benchmark by a hefty margin of over 10 per cent each.

However, fund managers continue to outperform the benchmark by wide margins. While the benchmark's net worth is down 34.3 per cent since the inception of Smart Portfolios on September 1, 2008, Anand Agarwal with a loss of 12.4 per cent has seen the highest loss among the four fund managers. In fact, Amar Ambani's portfolio has turned positive.

In the week under review, only three fund managers were active as Anand Agarwal remained on the sidelines. Cumulatively, they were net sellers of stocks worth Rs 0.49 lakh, which included aggressive buying of stocks worth Rs 1 lakh by Amar Ambani, and sale of stocks worth Rs 1.14 lakh by Kashyap Pujara.

For more details on Smart Portfolios please visit www.business-standard.com/smartportfolios

NO TRADE WEEK
ANAND AGARWAL
Fund Manager, Reliance Money

Anand Agarwal remained on the sidelines last week while his portfolio appreciated by almost a per cent to Rs 8.76 lakh from Rs 8.68 lakh. The reason for the significant under-performance was the high level of cash (at a time when the markets were moving up) in his portfolio.

One may recall that in the preceding week Agarwal sold stocks worth Rs 3.05 lakh. Presently, he has just two stocks in his portfolio - Reliance Communications and Indian Bank - both up 33 and 36 per cent, respectively. He continues to hold cash worth Rs 8.17 lakh.
 

Top Holdings	% of assets	Cost (Rs) Price	Current price (Rs)	Value (Rs lakh)
Reliance Comm	4.20	138.30	183.85	32.94
Indian Bank	2.51	64.62	88.10	36.34
Total investments	6.74			0.59
Cash	93.26			8.17
Net worth				8.76
Returns (%)	-12.42

 

BALANCED PORTFOLIO
SADANAND SHETTY
Vice President, Kotak Securities

Sadanand Shetty executed 17 trades last week, six buy and 11 sell. While he bought shares worth Rs 0.84 lakh, he sold stocks worth Rs 1.18 lakh. In the 11 sell trades executed, he booked gains in 10 of them. The best being Tata Steel which netted an average gain of around 26 per cent. He booked a 6 per cent loss in ICICI Bank.

Of the 12 stocks in his portfolio, six are up and six down. Reliance Industries with a gain of over 32 per cent is his best buy, while Allied Digital with a loss of nearly 52 per cent is a major drag on his portfolio. Shetty's net worth surged by 4.4 per cent to Rs 9.26 lakh from Rs 8.87 lakh.
 

Top Holdings	% of assets	Cost (Rs) Price	Current price (Rs)	Value (Rs lakh)
Reliance Ind	5.02	1169.58	1548.00	0.46
Power Finance	4.16	129.33	137.50	0.38
Godrej Consumer	3.90	121.76	120.40	0.36
Balrampur Chini	3.71	55.14	51.70	0.34
SBI	3.65	1154.76	1125.35	0.34
Total investments	34.77			3.22
Cash	65.23			6.04
Net worth				9.26
Returns (%)	-7.4

 

OFFLOADING CONTINUES
KASHYAP PUJARA
Fund Manager, ENAM Direct

Kashyap Pujara's portfolio value appreciated by 5.4 per cent from Rs 8.67 lakh to Rs 9.14 lakh, even as he booked losses in number of his trades. He executed 13 trades last week, of which there was only a single buy trade of Yes Bank. Off the rest, he booked losses in nine, and gains in the rest. Eventually, he was a net seller of stocks worth Rs 1.14 lakh. This follows sales of Rs 1.55 lakh in the preceding week.

Currently Pujara's holds four stocks in his portfolio - of which only Century Textiles is below is buy price (down 37 per cent). His cash limit has gone up significantly from Rs 5.63 lakh to Rs 6.78 lakh.
 

Top Holdings	% of assets	Cost (Rs) Price	Current price (Rs)	Value  (Rs lakh)
SBI	12.31	1099.56	1125.35	1.12
Idea Cellular	5.74	47.55	52.45	0.52
Century Textiles	4.73	343.87	216.15	0.43
Yes Bank	3.02	46.00	55.50	0.28
Total investments	25.82			2.36
Cash	74.18			6.78
Net worth