We, at Business Standard, had started ‘Smart Portfolios’ three years ago as an educational initiative for the readers. Now, we have entered the fourth season. Smart Portfolios, as we all know, is a year-long exercise where market experts run phantom portfolios with a base capital of Rs 10 lakh each, with the sole aim to make profits and beat the benchmark.
Smart Portfolios kick-started Season 4 on September 5. This time the season has got bigger, with five fund managers participating, against the four who have featured in the last three seasons. Some of the key changes in the rules include a transaction cost of 0.25 per cent for each leg of the trade. Other key changes are that a fund manager cannot invest more than 50 per cent of his net worth in mid- and small-cap stocks. However, there is no such cap on investments in large-cap stocks.
We have fixed the list of stocks falling under the large-cap category as the NSE 100 index components, as of August 31, for the entire season. However, the list of mid- and small-caps will be updated weekly, based on the following two parameters: (1) Free float market-cap has to be in excess of Rs 100 crore. (2) The average traded value in the last two weeks has to be minimum of Rs 50 lakh, on a combined basis (BSE+NSE).
And, finally, we have barred trading in equities on the listing day. The security will be made available the following day only if the free-float m-cap is above Rs 100 crore. The following fund managers are participating this season.
AJAY PARMAR
HEAD, INSTITUTIONAL RESEARCH, EMKAY GLOBAL
Investment Style: “Top-down and bottom-up approaches in mid cap and large-cap companies.” Parmar, the only rollover fund manager, remained on the sidelines in the first week.
ALEX MATHEWS
HEAD TECHNICAL AND DERIVATIVES RESEARCH, GEOJIT BNP PARIBAS FINANCIAL SERVICES
Investment style: “A blend of value and growth styles of investing in, both, large- and mid-cap stocks. Moreover, a fairly aggressive, bottom-up method of investment.”
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Mathews has invested Rs 1,50,000 so far. He recently bought Ranbaxy, following reports that the company was to release a generic version of the blockbuster cholesterol-lowering drug Lipitor in the US in November-end, as planned.
ASHISH MITTAL
FUND MANAGER - PMS, CENTRUM WEALTH
Investment style: “Value investing. Looking for deep value stocks, thematic stock ideas with investment of at least one year; potential takeover candidates; turnaround sectors such as interest rate-sensitive sectors at the time of expected peak out in interest rates.”
Mittal, so far the most active fund manager, has made 19 purchases, worth Rs 5,00,000. His prominent investments include MRF and GlaxoSmithKline Pharma.
MEHRABOON IRANI
PRINCIPAL & HEAD – PRIVATE CLIENT GROUP (PCG), NIRMAL BANG SECURITIES
Investment Style: “Identify stocks which end up going at attractive valuations. However, no cost fundamentals will be sacrificed.” Irani has been fairly active, with a total of 21 transactions to his credit. He has made purchases worth Rs 4,50,000, with prominent investments in Vivimed Labs and Educomp Solutions.
RIKESH PARIKH
VP EQUITY STRATEGIES, MOTILAL OSWAL SECURITIES
Investment Style: “Opportunistic, with value investment approach” Parikh has made three purchases so far — Bharti Airtel, Cipla and NTPC, totalling a little over Rs 1,00,000.
For more details on Smart Portfolios, visit: www.smartinvestor.in/sp