Icon times
SIP Stock in India | SIP Stock Model Portfolio

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

Published on 31 May 2021 Views 16474 Comments 55

Investment objective

The aim is to generate long-term returns by creating a large-cap and mid-cap stocks only portfolio with a SIP focus between INR 20,000 to INR 25,000 per month.

Strategy

Buy and Hold investments with a time horizon of at least 5 years in stocks with moderate to high risk and consistent performance.

Use Case

This model portfolio is useful for investors who have a periodic pool of money to invest in direct stocks for meeting long-term investment goals. This portfolio comprises of investing in direct equities and is meant for investors with a moderately high-risk appetite. The portfolio is built primarily from Large Cap stocks; however, there is some allocation done to Mid Cap stocks as well.

Methodology

Rebalancing Frequency

The portfolio is rebalanced once in a quarter to bring back the sectoral allocation at the desired level and for an in-depth stock level check.

Portfolio Monitoring

Model Portfolios are monitored monthly to assess any exit/entry required based on market events, significant sector-level changes, any company-specific announcement, analyst reports, or any corporate governance issue.

Sectoral Allocation and Stock Selection

This model portfolios follow Warren Buffett’s principle where he says that an individual should invest only in the companies whose business they understand. And therefore, “Consumption” is the core theme for constructing this portfolio along with some peripheral sectors like Paints, Healthcare, Retails etc i.e., investing in companies that are into consumer-centric businesses that grow with consumption and businesses that are into financing this retail consumption. There are a few peripherals stocks too that do not fit completely into the consumption theme, but their inclusion is driven by the strong fundamentals of the company and the company’s effort in making their brand and product visible to retail investors. The idea is to utilize quantitative and qualitative factors observed based on our extensive research for suggesting a SIP model portfolio that makes sense for individual investors.

Who should refer to this Portfolio?

This SIP portfolio is appropriate for disciplined investors who are looking for periodic investments in direct stocks and have moderate to high-risk tolerance with a time horizon longer than five years.

Systematic Investment Plan or more popularly known as SIP, as we all know is to invest a pre-determined amount at a regular interval. SIP is a synonym of disciplined investing wherein an investor stops worrying about finding the “right time to enter the market” and benefits from the power of compounding and average costing. The idea is to use this proven investment philosophy of SIPs for Model Portfolio users that can help stock investors in following the SIP approach utilized popularly for Mutual Funds. The weighting scheme in this model portfolio uses fundamental weights obtained by analyzing ratios used in fundamental analysis.

Risk Profile

The SIP portfolio is meant for moderately aggressive investors i.e. investors who are willing to accept periods of moderate to high market volatility in exchange for the possibility of receiving returns that outpace inflation by a significant margin. It is important to have a long-time horizon for moderately aggressive investors investing in direct stocks because if there is a severe downturn in the market, an investor will need plenty of time to make up for the decline in value.

The expected average rate of return from a SIP portfolio is 11-14% over time. In its best year, it might gain 15-20% and in its worst year, it could decline by 20-30%.

 

These are typical investor profiles who can refer to this portfolio –

1.      A low-risk taker 20 – 30-Year-old investor with limited liabilities and above-average savings rate

2.      A medium risk-taker 35 – 50-year-old investor with dependents and high savings rate and a fair allocation already done to mutual funds for meeting their retirement goals.

3.      A high-risk taker above 50-year-old investor with no liabilities and a good retirement corpus in place

Typically, to begin investing, we recommend starting with the mutual fund route, wherein you rely on the professional expertise of fund managers for making stock choices for you. After the initial learning curve, we suggest following it up with the combined approach of Mutual Funds and some percentage of direct stock exposure.

Time Horizon

Min. 5 years

Rebalancing

Quarterly

Important Dates

Inception Date - February 11th, 2020

Launch Date - February 22nd, 2020

Market Cap Category - Multi-Cap

Last reviewed – September 20th, 2021

Next Rebalancing on – December 20th, 2021

SIP Model Portfolio's performance against BSE 200

Time Period

Portfolio Return %

BSE 200 Index Return %

1 month from August 31st to September 30th)

9.23%

4.41%

3 months

15.45%

12%

1 Year

53.68%

61.22%



Guidelines

  1. 10 - 15 stocks portfolio
  2. Stock portfolio - Minimum exposure of 5% and maximum 15% to avoid concentration risk.
  3. Minimum investable amount per month between INR 20000 to INR 25000

 

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 Portfolios are prepared by SEBI Registered RIA.

Attachments
File Name
private article suscription area icon

You like to know more. We like that!

Please subscribe Model Portfolio Plan to get access of all premium model portfolio articles Only at Rs 7499/Year.

Please login to view this free article.

This blog is available only for logged in users, please register and get access to view this article.

LATEST UPDATE

premium Premium
free Free
Read More

REPORTS


Chat on WhatsApp
Caret UP Arrow
InvestYadnya Support
Typically replies in minutes
InvestYadnya Support
Hi there
Welcome to InvestYadnya.
We are available to assist you on WhatsApp.
Please click on the button below to chat with us.
(10 AM to 7 PM IST)
16:10
Chat with InvestYadnya