Yadnya’s Model Portfolios Performance - Gearing up for the Marathon named Long-term Investing

Yadnya’s Model Portfolios - Gearing up for the Marathon named Long-term Investing

Many marathon runners often say, ‘A marathon is an event where everyone starts as equals, but legends are made at the finish line.’ This sentiment holds true for investing as well. The journey begins with small, consistent steps—investing month after month, staying focused on financial goals, and demonstrating resilience through market fluctuations. Just like a marathon runner overcomes physical and mental barriers, investors must navigate market uncertainties, economic downturns, and global events like the COVID-19 pandemic, the Russia-Ukraine war, and inflation-driven recessions. Success lies in perseverance, preparation, and staying the course despite challenges.

It has been over five years since we introduced our risk profile-based model portfolios, and the journey has been truly rewarding. Our goal has always been to assist investors in this marathon of long-term wealth creation by fostering disciplined investing grounded in rigorous research. As we reflect on this journey, here is a snapshot of how our model portfolios have performed since their inception and over the past year.

^{(**The Quanto-Funda model portfolio strategy was changed in December 2022. In the earlier methodology, we calculated sector-wise scores and picked the top performers in a respective sector based on the performance of stocks on various fundamental and quantitative parameters. In the new methodology, we have shifted to a more momentum-oriented strategy.)}

The recent market correction has influenced portfolio performance across various investment strategies. While short-term volatility has presented challenges, long-term CAGR figures remain robust, reaffirming our disciplined approach to asset allocation and risk management. Growth-oriented portfolios with higher exposure to mid and small-cap stocks have experienced some temporary setbacks, whereas diversified and conservative portfolios have continued to demonstrate resilience.

Despite these fluctuations, our focus remains on long-term fundamentals, disciplined asset allocation, and maintaining a strategic approach to investing.

Among all the model portfolios, the "Quant Portfolio" stands out as the top performer based on 1-year returns, delivering a robust 17.31% return for the period from Jan 31, 2025, to Jan 30, 2026. In comparison, the NIFTY 50 TRI provided a return of 6.37%, while the S&P BSE 500 TRI delivered a return of 6.54% during the same period.

Performance of Risk Profile-based model portfolios: 

Our core model portfolios, designed for various risk profiles, incorporate a balanced mix of equity and debt. The risk profile-based portfolios (Moderate, Conservative, and Growth) demonstrated resilience amid a volatile year. Notably, all three portfolios maintain a lower beta, ensuring better downside protection.

The Growth Portfolio, with a Beta of 0.66, is designed to mitigate market volatility, resulting in a more measured decline compared to broader indices. These portfolios have successfully navigated extreme market events, including the COVID-19 pandemic, inflation-led interest rate hikes, and geopolitical uncertainties. Their consistent performance underscores our philosophy of prioritising risk management. The annual returns of the Growth, Moderate, and Conservative portfolios are 6.11%, 9.74%, and 8.50%, respectively, while long-term (since inception) CAGR returns align with their respective risk expectations at 15.25%, 13.99%, and 13.57%.

Performance of Stock-only model portfolios: 

Stock-only portfolios, which typically carry 100% equity exposure, saw mixed results in the last year. The highlight here is the Value – Stock Only portfolio, which delivered a stellar 26.39% CAGR since inception. True to its investment philosophy, the Value Portfolio focuses on fundamentally strong businesses available at attractive valuations. This strategy, focusing on a blend of large caps and midcaps, was able to preserve substantial long-term gains with a one-year return of 12.09%.

Small and MidCap – Stock Only, targeted at high-risk takers, posted a long-term CAGR of 11.94%, with a 1-year return of 2.63%.

The SIP - Stock Only Portfolio is designed for moderately aggressive investors and is fully allocated to equities (100%). The recent 1-year performance shows a marginal decline of -0.05%, underperforming the Nifty50 TRI benchmark. This underperformance highlights the market volatility and corrections experienced in the last year, especially in broader equities and small-cap segments.

Student and Early Earner, designed for younger investors, delivered a low single-digit return of 3.60%, while posting an impressive 15.77% CAGR since its inception, underscoring the benefit of long-term discipline.

Thematic and niche portfolio, i.e. our NextGen Opportunities (formerly known as EV and Green Energy) Portfolio faced significant headwinds, underperforming sharply (-15.32% for the year), highlighting the inherent volatility and sector concentration risks.

The ESG-focused Happy Earth model portfolio managed a positive 3.95% CAGR, despite a -3.93% dip in the latest year.

The Quanto-Funda Portfolio, designed for high-risk investors, has faced some short-term headwinds due to its higher sensitivity to market movements (Beta of 0.82). This portfolio has delivered a very strong performance in the past year, with a significant outperformance compared to the broader indices. Over time, this approach aims to capitalise on high-growth opportunities, maintaining a balance between risk and reward.

Performance of Fund of Fund Model Portfolios:

The multi-asset fund-of-funds approaches did well, especially the Wealth Creation – MF Only portfolio, which posted a robust 22.32% CAGR since Launch and outperformed most equity indices on a 1-year and long-term basis. All Seasons ETF Portfolio and Regular Income with Growth portfolios continued to build on capital preservation and income orientation, with one-year returns varying depending on their equity-debt mix.

Our Wealth Creation Portfolio has delivered an annual return of 8.03%, with an impressive since-inception CAGR of 22.32%. This highlights the effectiveness of our risk-conscious investment strategy. As famously stated, "The essence of investment management is the management of risks, not the management of returns."

Conclusion:

While short-term market movements can create fluctuations in returns, our disciplined investment framework and strategic asset allocation continue to deliver strong long-term performance. By focusing on fundamentals, risk-adjusted returns, and a well-diversified approach, our portfolios remain well-positioned to navigate market cycles and create sustainable wealth for investors.

For the whole team of Yadnya, it is very satisfying to see that the investment objectives and goals for which the respective model portfolios have been created are being met following a strict regimen of the risk management framework. Legendary investor Charlie Munger famously said that risk to him isn’t just stock volatility; risk to him is the risk of permanent loss of capital as well as the risk of inadequate returns. Taking bigger risks for big gains seems fancy, but the fanfare stops when big risks lead to big losses. For us, managing the downside risk, i.e., prioritising risk over reward but with a focus on the upside, is going to remain our mantra!