Quanto Funda Model Portfolio in India | Model Stock Portfolio | Yadnya Investment Academy (Methodology Document)

Introduction
Pythagoras, a famous Greek Philosopher who made important developments in mathematics, astronomy, and the theory of music once said, “God built the universe on numbers”. On the other hand, Plato another Greek Philosopher said, “A good decision is based on knowledge and not on numbers”.
So, we took the middle path by following the widely known fundamental stock analysis but narrowing the scope to quantitative factors only to keep any human bias away. Qualitative factors require keen observations and then analysis based on these observations making it prone to human bias. By considering only quantitative numbers we let the numbers do the talking for finding out “hidden gems” and help us find the high momentum stocks that are walking the talk of being a performance driven company.

Stock Selection Approach
Appearances aren’t everything; however, in a world influenced by social media driven storylines, it is becoming more and more difficult to separate the wheat from the chaff. What we read, people with whom we interact, media channel that we watch, all these things leave an impact on our mind and promote replicating their narrative in our psyche too. It is becoming increasingly difficult to keep ourselves insulated from the outer world’s hidden narratives, making us more prone to be prejudiced while making our investing decisions.
We have tried to eliminate these predispositions by providing scores to stocks based on many fundamental parameters like Sales Growth, Institutional Holding and quantitative parameters like Beta, Stock Return, Volume Growth etc.

Investment objective
The aim is to generate an extra Alpha over the Benchmark by investing into a concentrated portfolio of quality-tested high momentum Indian companies using a broad-based quantitative analysis.

Strategy
Momentum Factor-driven Strategy with an investment horizon of 5 year based on a strong quantitative fundamental characteristic

Methodology

 
Sectoral wise breakup of the portfolio



(Note: The sector-wise break-up will change in line with quarterly rebalancing as per the selected stocks in the future portfolios)

 
Is this model portfolio for you?
This portfolio is meant for seasoned investors with high-risk appetite with a time horizon of at least 5 years. The selected top 15 stocks are assigned equal weights. The numbers change with every quarter’s result leading to changes in the top performer as per their performance during that quarter. Thus, this portfolio is expected to have more changes during every rebalancing as compared to other model portfolios.
Over the time, the expected extra alpha from a portfolio is around 4-5% above the performance of benchmark BSE 500 Index. In its best quarter, the portfolio might gain 25-30% and in its worst year, it could decline by the same scale.

These are typical investor profiles who can refer to this portfolio –
1.     Seasoned Equity Investors who are looking for extra growth & alpha
2.     Active Investors who are comfortable with high portfolio churn every quarter

FAQS

What is Yadnya’s Quantitative Analysis?
Quantitative analysis is basically analysis done purely using numbers. Now, these numbers could be the fundamental parameters (Sales growth, Institutional Holding etc.) or momentum parameters (Beta, Stock Return, Stock Volume growth etc.) or technical indicators or macroeconomic factors or for that matter it could be statistical models made on a combination of all these parameters. Yadnya’s quantitative analysis is primarily a numerical analysis of many fundamental as well as momentum indicators. The foundation of this quant analysis is the broad-based level analysis, where we have selected quality-tested high momentum stocks from BSE 500 index.

Is Quantitative analysis like Algo Trading?
The similarity is that both the methods are automated to keep human bias away while making decisions. The difference lies in the fact that Yadnya’s Quantitative Analysis is for “Investing” while 22Algo is for “Trading”. Algo trading looks at the price fluctuations, patterns, and other price related data while Yadnya’s quantitative analysis is focussed on having an automated solution for quantitative fundamental analysis of stocks to find out sector wise top performers.

Minimum Time Horizon
5 years

Rebalancing
Quarterly

Index
BSE 500 Index

Important Dates
Inception Date – October 15th, 2021
Launch Date – October 15th, 2021
Market Cap Category – Flexi Cap
Last Quarterly Rebalancing – September 2, 2023
Next Quarterly Rebalancing – December 2, 2023

Portfolio Returns




Disclaimer: The information on this site is provided for reference purposes only and should not be misconstrued as investment advice. Under no circumstances does this information represent a recommendation to buy or sell stocks. All these portfolios are created based on our expert’s experience in the market. These Model Portfolio are prepared by SEBI Registered RIA.