If your horizon is more than 5 years and objective is Wealth Creation, Mid-Caps and Small Caps make A lot of Sense
Mid-Caps and Especially Small Caps have seen massive fall in past 18 months or so, because of three factors,
- Long term capital gain tax that was introduced in 2018 budget,
- Re-categorization of mutual funds that was introduced in Mar-Apr, 2018
- NBFC crises that started with IL&FS default in Sep, 2018 leading to squeeze of liquidity.
So, If one wants to invests for long term, this is the time to invest in quality Mid-Caps. Let’s learn from Historical Pattern of Hard Numbers, Why ?
India’s GDP Milestones
In 2009: $ 1.3 Trillion
In 2014: $ 2.0 Trillion
In 2019: $ 2.85 Trillion
2025: $ 5 Trillion ( Targeted)
Indian Economy’s’ Performance
5 Years: 42.5%,
10 Years: 110%
Absolute Performance of Indices
5 Years: 73%,
10 Years: 281%
Nifty Mid Cap 150
5 Years: 138%
10 Years: 528%
Nifty Small Cap 250
5 Years: 104%
10 Years: 370%
Stock Market is the Mechanism of transferring Wealth from Impatient to the Patient, So, if by 2025, Indian economy’s GDP is expected to be $5 Trillion. One can imagine what could be in store for long term investors for next 5 and 10 Years.
There is a famous saying, Big companies make small moves, but small companies make very big moves. This is exactly what happens when one holds a bouquet of high-quality small & mid cap companies as over long term as some of these companies become large caps and giant companies over time. Some of the today’s Nifty companies were mid-caps and small caps 10-15 years ago.
Where can one Invest? Good and Clean is one of the best performing Mid Cap PMS and has been covered by economic times recently for its consistency of high performance during tough times
What is the Fee Structure? Zero Fixed Fee till 8% p a of hurdle rate, with high water mark and 20% profit sharing on incremental performance. High watermark means a performance less than 8% in any year is added to the huddle of next year. Absolutely investor friendly pricing
What is Exit Load Structure? Zero Exit Load
Clean Denotes :
No political connectivity | High corporate governance | Clean accounting | High Promotors integrity | Ethics never compromised | No related party transactions | No favors to relatives | No linkages to bureaucrats
Good Denotes :
Focused capital allocation | High ROE | High ROCE | Oligopolistic nature of business | High Earnings | High Cash flows
The intelligent investor is a one who is a realist, who sells to optimists and buys from pessimists ~ Benjamin Graham
As the above quote implies, this is exactly how wealth is created in stock markets, provided one invests in quality and holds for long terms.
There are many Multi cap PMS portfolios as well which have exposure to select mid/and smalls as well. We at PMS AIF World (www.pmsaifworld.com) do an unparalleled research, and suitability analysis. For high risk takers and for one to invest purely in mid-caps, we recognize Ambit Good and Clean PMS as one of the right mid cap investment products for informed investors.
Disclaimer: Investments are subject to market risk. This write up is issued by PMS-AIF and is produced for information purposes only. Information and opinion contained in this document are published only for the assistance of the recipient. It is neither a solicitation to sell nor shall it form the basis. Or be relied upon in connection with any contract or commitment whatsoever or be taken as investment advice.