Baskets

ReviewHalf Year Ending July 2021

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Baskets offer a single-click option for investors to start

and grow a professionally curated and diversified

portfolio to create long term wealth. The 24-odd

baskets available on our platform span a broad range of

strategies and themes. Each basket contains multiple

stocks/ETFs, mitigating company-specific risks.

Here’s a quick update on the top three hits and misses

from our baskets. Finally, refer to our ‘Baskets at a

glance’ table in this report to see churn, risk and

performance data for all our 24 baskets at one go.

Happy investing!

Basket Review

DISCOVER BASKET INVESTING

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Top 3 Outperforming Packs

Wonder Women

• Wonder women pack has outperformed all the other packs in past six months. It has risen 37% compared to its benchmark Nifty 500’s returns of 16.1% in past six months.

• Right stock selection played a key role in outperformance of this basket. CCL products is the top performer of this basket and its stock price surged by 85% in the last six months.

• CCL's expertise lies in making consistent coffee blends which has resulted in long standing relationships with clients and stickiness in business. CCL's upcoming 3500 tonne Vietnam capacity should likely drive volume growth over the next few years.

• Bajaj Electric, Trent and Jubilant foods were other notable outperformers from this basket.

• Lupin was the only component that underperformed on back of regulatory challenges in developed markets.

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Top 3 Outperforming Packs

L&T Pack

• L&T pack has been figuring in our list of outperforming baskets consistently and once again it has performed better than other packs in the past six months. It has risen by 35% compared to benchmark return of 11.7% in past six months.

• Three technology companies in this pack: L&T Infotech, L&T Technology services and Mindtree are once again leading the charge and helping this pack to perform superlatively.

• L&T groups’ IT companies are benefitting from record deal wins in digital and cloud segments.

• During the Covid outbreak phase, many corporates were forced to adopt new technologies and digitise their processes. Many used IT solutions to cut costs and improve margins.

• L&T Finance holdings underperformed once again due to its legacy troubles in infrastructure segment. Also, second wave hit to rural have meant that L&T Finance Holdings Ltd’s operating metrics suffered.

• L&T - the parent company has performed quite well off-late on the back of sustained growth in new orders and its ability to protect the operating margins aided by cost control measures.

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Top 3 Outperforming Packs

ICICI Pack

• ICICI Pack has all the listed companies of ICICI group in equal weight.

• This is the third best performer amongst the baskets offered with returns of 34.8% Vs11.7% of its benchmark in past six months.

• Booming markets and growing volumes led to robust growth in brokerage business. ICICI securities is the top performing constituent of this basket and has risen by 78%.

• Despite Covid-19 related challenges ICICI prudential life insurance’s Value of New Business grew by 78% in the recent quarter and that has helped the stock price go up by 32%.

• ICICI Bank continues to grow its book profitably and its outperformance contributed towards higher returns from this basket.

• Due to the second wave of the pandemic, there was a severe impact on health segment of ICICI Lombard General Insurance.

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Underperforming Baskets

HRITHIK Pack

• HRITHIK is an acronym of seven major stocks i.e. HDFC, RIL, Infosys, TCS, HUL, IndusindBank and Kotak Mahindra Bank. This pack has gone up by only 5.8% compared to 11.7% return from its benchmark and it is the most underperforming pack.

• As the spread of Covid-19 infection receded and economic activities picked up, investors choose to focus on small and midcap stocks. Large cap stocks especially HRTHIK stocks have underperformed their smaller peers.

• Kotak Bank underperformed markets as the RBI capped the tenure of bank chief executives at 15 years, a rule that could affect Kotak Mahindra Bank where founder-CEO Uday Kotak may not be eligible for another term.

• IT major TCS consolidated for past six months to allow its fundamentals to catch-up with stellar price rise of the last year.

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Underperforming Baskets

All weather Investing pack

• All Weather Investing is a basket of ETFs that offers you exposure to three asset classes -Equity, Gold, & Debt. This pack has gone up by 7.1% compared to 11.7% return from its benchmark and it is the second most underperforming pack.

• Rally in equity markets means a diversified basket with an allocation to other defensive asset classes will not be able to match the returns of the pure Equity index.

• It is designed as a stable basket - which will ensure that neither your investment ship will sink, nor the investment flight will soar to scary heights. It outperformed the equity Index massively between January to March 2020 period, was successful in protecting the capital and grow it steadily while equity indices collapsed.

• This basket had 29% allocation to Gold and underperformance from the shiny metal in past six months has hurt the performance of this basket. Liquid funds returns have also collapsed during the last six months, where about 23% of funds were allocated.

• This is the second worst performing basket with 7% gain Vs 11.7% from its benchmark for six month period under review.

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Underperforming Baskets

Equity & Gold pack

• This basket invests in Equity & Gold, fixing their weights to 70% and 30%. This pack has gone up by 7.8% compared to 11.7% return from its benchmark and it is the third most underperforming pack.

• It invests in large-cap companies using Nippon India ETF Nifty Bees. Large cap companies are usually well established and the chances of such companies going bust are low

• Adding such stocks to the portfolio increases stability of the portfolio as their stock prices are not very volatile. They are also best suited for long term wealth creation.

• This basket invests in Gold using Nippon India ETF Gold Bees• Historically gold has maintained its value and is the best form of hedge against inflation

and geo-political uncertainties. Since price of gold is negatively correlated with price of equity, it is a very effective portfolio diversifier.

• Underperformance from the shiny metal in past six months has hurt the performance of this basket.

• This is the third worst performing basket with 7.8% gain Vs 11.7% from its benchmark for six-month period under review.

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New Baskets

We are discontinuing (Playing out) two baskets viz. HRITHIK pack and Defensive pack, as the components of these baskets are underperforming and no longer moving in line with respective themes.

We are replacing them with two thematic packs: (1) IT (2) Commodities

IT pack Constituents

Name Weight

HCL TECH 10

INFOSYS 15

KPIT TECH 10

MASTEK 10

SONATA 10

TCS 10

TECH MAH 10

WIPRO 15

ZENSAR 10

Commodities Pack Constituents

Name Weight

ACC 10

GRASIM 10

HINDALCO 10

RELIANCE 10

TATASTEEL 10

AARTIIND 5

BPCL 5

COROMANDEL 5

HINDPETRO 5

HINDZINC 5

JSWSTEEL 5

NMDC 5

TATAPOWER 5

TORNTPOWER 5

UPL 5

Kindly refer to detailed notes on these packs for investment rationale.

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Market Outlook

Indian markets face the dilemma of pandemic troubles for its vast unlisted space while the listed space continues to do well aided by rising retail participation and a booming IPO market.

Our markets face the global risks of monetary tightening and consequent unwinding of carry trade, geopolitical risks, commodity price rise affecting our balance of payment and fiscal deficit, recurrence of Covid-19 in some form or other over the next few quarters hindering the return to normalcy. Locally the risks include inflation remaining stickily high, interest rates rising to combat inflation and/or protect the currency, partial failure of monsoon and its impact on rural spend, the fiscal situation getting more precarious, asset quality getting worse and credit rating of India being considered for a downgrade etc.

Valuation parameters have to be re-examined in the context of the developments over the past few quarters. At the same time one needs to be grounded and not get over exposed to equity as an asset class to protect oneself from the unexpected selloffs. Investors will have to be more selective from now onwards and move up the quality ladder.

If an investor’s asset allocation has tilted more towards equities due to the rally in equity markets, it may be time to reduce equity exposure by taking profits and restoring the originally planned allocation. They should follow money management rules.Hitherto Underperforming baskets like “All-weather investing” and “Gold & Equity” pack warrant an allocation according to one’s risk appetite for the next 6 months.

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Baskets – Ready Reckoner

Basket Name Churn Category Risk - Category Benchmark

6 Month

Basket

Returns

6 Month

Benchmark

Returns

1 Year

Basket

Returns

1 Year

Benchmark

Returns

3 Year

Basket

Returns

3 Year

Benchmark

Returns

Wonder Women Medium Aggressive NIFTY 500 37.0 16.1 84.1 53.0 119.2 42.5

L&T Pack Very Low Aggressive NIFTY 100 35.0 11.7 110.4 45.1 96.0 39.0

ICICI Pack Very Low Aggressive NIFTY 100 34.8 11.7 52.7 45.1 116.0 39.0

India Horizons All-star Portfolio Medium Moderate NIFTY LARGEMIDCAP 250 34.3 20.3 81.1 61.4 68.7 48.2

Double Earning Pack Medium Aggressive NIFTY 100 32.9 11.7 115.7 45.1 139.0 39.0

SuperPack 2021 Very Low Aggressive NIFTY 100 27.8 11.7 53.1 45.1 25.6 39.0

Pharma Tracker Medium Aggressive NIFTY LARGEMIDCAP 250 26.3 20.3 44.0 61.4 108.4 48.2

Dividend Aristocrats Very Low Aggressive NIFTY 100 26.2 11.7 66.3 45.1 84.4 39.0

Fallen Angels Medium Aggressive NIFTY LARGEMIDCAP 250 24.9 20.3 68.2 61.4 28.1 48.2

Bajaj Pack Very Low Aggressive NIFTY 100 19.2 11.7 70.9 45.1 78.2 39.0

India Horizons Bellwether Portfolio Medium Aggressive NIFTY 100 19.1 11.7 52.4 45.1 44.9 39.0

Insurance & AMC Pack Very Low Aggressive NIFTY 100 18.9 11.7 32.4 45.1 96.5 39.0

Smart Beta Low Moderate NIFTY 100 15.8 11.7 46.5 45.1 54.6 39.0

Low Risk Smart Beta Medium Aggressive NIFTY 100 15.5 11.7 39.8 45.1 51.9 39.0

Rising Rural Demand Medium Aggressive NIFTY 500 15.5 16.1 35.8 53.0 22.0 42.5

Platinum ETF Very Low Aggressive NIFTY 100 14.8 11.7 50.4 45.1 36.1 39.0

Shubh Aarambh Medium Aggressive NIFTY 100 13.6 11.7 29.4 45.1 51.9 39.0

Defensive Stocks Medium Aggressive NIFTY 100 13.0 11.7 43.4 45.1 78.6 39.0

Quality Smart Beta Very Low Aggressive NIFTY 100 12.0 11.7 32.5 45.1 46.2 39.0

Banking Pack Very Low Aggressive NIFTY 100 8.4 11.7 70.6 45.1 53.6 39.0

Equity & Gold Medium Moderate NIFTY 100 7.8 11.7 26.9 45.1 53.6 39.0

All Weather Investing Medium Aggressive NIFTY 100 7.1 11.7 15.4 45.1 43.1 39.0

HRITHIK Pack Very Low Aggressive NIFTY 100 5.8 11.7 33.8 45.1 42.9 39.0

HDFC Pack Very Low Aggressive NIFTY 100 -4.3 11.7 26.6 45.1 50.0 39.0

*Value as on 31st July 2021Explanation of Churn categories:VERY LOW churn - Basket constituents are changed once a year.LOW churn - Basket constituents are changed once in 6 months.MEDIUM churn - Basket constituents are changed once a quarter.

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Disclaimer

Di sc l a imer

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