Consistency + Quality = Compounding
Retail Participation to the Indian Equity market has surged to 15 years high. These levels were last seen during the midpoint of the historical bull run of 2003-2007. At present around 70% of daily equity market volume is driven by retail investors and the remaining 30% is driven by foreign institutional investors, mutual funds, and insurance companies.
The retail volume comprises of 3 types – intra-day trades, delivery based trades, long term stock pickers. Markets off-late have been supporting, all 3 types of retail investors, however, only a few who will stick to quality and will hold for the long term, will experience Wealth Creation. It is easier said than done.
Owing to fear and greed, the human mind plays a trick, and as a result, as investors see some profits, they exit quality from their self-managed portfolios, what is left is mediocre or poor quality shares in the self-managed portfolio and to make it worse, these are held for a long term, and hence, instead of wealth creation, what is experienced is wealth destruction.
What is essential in long term wealth creation is buying quality businesses and holding them for a longer period of time. So, it’s not just a few trades, It’s about compounding which is achieved through disciplined long term investing( i.e. Quality + Consistency = Compounding). This is exactly what Portfolio Management Services (PMS) aim at– whereby quality businesses are held for a considerably longer period of time leading to stupendous wealth creation. We present the top 20 holdings across PMS as a case in point where the fund managers despite a sharp rally in stocks have continued to hold the same businesses for a longer time across March, April, May, June and ….likewise in Long term
| Stock | PMS Count | Min % | Max % | Avg % |
|---|---|---|---|---|
| HDFC BANK | 47 | 3.50 | 12.73 | 7.66 |
| RELIANCE INDUSTRIES | 33 | 1.26 | 13.97 | 7.83 |
| ICICI BANK | 29 | 2.60 | 19.80 | 6.80 |
| BHARTI AIRTEL | 27 | 1.22 | 9.22 | 5.71 |
| HINDUSTAN UNILEVER | 21 | 0.91 | 10.42 | 5.30 |
| ASIAN PAINTS | 20 | 1.66 | 11.00 | 5.30 |
| KOTAK MAHINDRA BANK | 20 | 2.12 | 18.20 | 6.75 |
| BAJAJ FINANCE | 18 | 2.56 | 31.02 | 7.86 |
| INFOSYS | 16 | 2.02 | 8.33 | 5.58 |
| AARTI INDUSTRIES | 13 | 2.04 | 29.75 | 7.93 |
| ITC | 13 | 1.42 | 12.00 | 5.57 |
| HOUSING DEVELOPMENT FINANCE CORPORATION | 13 | 1.11 | 9.05 | 5.74 |
| DIVIS LABORATORIES | 12 | 3.53 | 6.84 | 5.87 |
| ICICI LOMBARD GENERAL INSURANCE COMPANY | 12 | 0.91 | 13.70 | 5.61 |
| TITAN COMPANY | 11 | 2.18 | 8.57 | 3.96 |
| PIDILITE INDUSTRIES | 11 | 0.33 | 11.00 | 6.17 |
| AXIS BANK | 11 | 1.41 | 13.70 | 4.73 |
| CUMMINS INDIA | 10 | 1.45 | 4.50 | 2.91 |
| SUN PHARMACEUTICALS INDUSTRIES | 10 | 2.08 | 16.50 | 5.44 |
| SANOFI INDIA | 10 | 3.50 | 9.00 | 6.88 |
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| Sector | PMS Count | Min% | Max% | Avg% |
|---|---|---|---|---|
| BANKING / FINANCIAL SERVICES | 96 | 1.11 | 41.30 | 18.02 |
| PHARMACEUTICALS | 48 | 4.50 | 54.20 | 13.63 |
| IT - SOFTWARES/SERVICES/CONSULTING | 40 | 0.24 | 17.00 | 9.57 |
| INDUSTRIALS | 32 | 2.13 | 27.50 | 11.59 |
| CONSUMER DISCRETIONARY | 28 | 1.18 | 31.92 | 12.91 |
| MATERIALS | 24 | 0.80 | 30.00 | 12.60 |
| ENERGY | 22 | 1.30 | 27.00 | 10.29 |
| CHEMICALS | 19 | 1.93 | 25.60 | 11.72 |
| CONSUMER STAPLES | 18 | 4.17 | 28.10 | 12.86 |
| FMCG | 18 | 2.90 | 29.80 | 9.71 |
| HEALTH CARE | 16 | 7.60 | 32.30 | 13.97 |
| OIL & GAS | 15 | 2.00 | 20.28 | 8.78 |
| CONSUMER DURABLES | 14 | 2.50 | 31.00 | 11.12 |
| AUTOMOBILE & ANCILLARIES | 13 | 3.49 | 16.31 | 7.95 |
| HEALTHCARE | 13 | 4.18 | 25.00 | 11.42 |
| SPECIALITY CHEMICALS | 12 | 4.00 | 34.00 | 21.94 |
| TELECOM | 12 | 1.79 | 13.00 | 5.49 |
| AUTOMOBILE | 11 | 2.00 | 14.00 | 6.60 |
| NBFC | 10 | 2.03 | 30.13 | 11.55 |
| RETAIL | 9 | 3.74 | 14.60 | 8.60 |
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We have been sharing a Cautiously OPTIMISTIC stance since April 2020, as the month of March had actually led markets to oversold levels even in the high-quality segment of the market. While we continue to maintain the same stance, we would like to re-iterate we have always maintained, that the ultimate aim of investing should be wealth creation which requires two significant factors, one, long term horizon ( 10 years ), and second, consistent compounding. Both of these factors are only possible if one focuses on investing in high-quality businesses.
How WE add VALUE
PMS AIF World is a New Age Wealth Management Firm backed by analysis & content. We are delivering an excellent experience of INFORMED INVESTING in focused and concentrated portfolios that are managed by highly experienced money managers.
It is in our genesis to suggest investors the right and the best investment avenue, suitable to investor’s risk profile. We are very selective in our approach, and analyze products across 4 Ps – Philosophy, Performance, Portfolio, and Price with an endeavor to ascertain the Quality, Risk, and Consistency(QRC) attributes before suggesting the same to investors.
We offer responsible, long term, analytics backed quality investment service.
If you are looking to invest and are not able to decide between PMS and Mutual Funds, or between PMS and Alternative investment funds, book an appointment with our experts.
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