This is Capitalmind’s longterm passive portfolio for Premium members. Large-cap stocks are those which have a market cap of more than Rs. 10,000 crores.
We started this portfolio with about 10-30 large-cap stocks, only long. After about a year, we analyzed the performance and we were down about 10% compared to the index which was only down 3.5%. The one year isn’t that much – however, we decided to take a deeper look.
It has turned out that for large caps,a single combination of Nifty top 50 plus Nifty Next 50 have beaten most of the large cap mutual fundsover 3, 5, 7 and 10 year periods, on a rolling basis!
*Updated Weekly, refer to the date in the first row of the table below
Note: we have now added the Nasdaq 100 fund which has beaten most funds across the industry.
Note: 26 May 2022: We replace MON100 with MID150BEES. Why exit MON100?
There is an ongoing restriction on the overseas investment industry with a limit of $ 7 billion for all mutual fund houses. Most of the India-based Nasdaq 100 Mutual funds & ETFs stopped accepting new investments or creating new units. This artificial scarcity had created a premium for India traded Nasdaq funds & ETFs compared to Nasdaq 100 Index. Our own holding, MON100 is trading at a premium of 10%. In other words, we had fallen less. Nasdaq 100 had a current drawdown of -28.2%, while MON100 was down only by -19.3%.
Considering the restriction on further investments, limited avenues to invest & market anomaly of a 10% premium, we are exiting MON100 from our Passive portfolio.
We saw 96.2% returns on MON100, even after the recent fall in about two years.
As we move out of international exposure, the next best option is to look back for other avenues to invest in India. And it should be passive, diversified & non-overlapping with existing holdings. Since we are already holding Nifty 50 + Nifty Next 50, we have chosen to go ahead with Nifty Midcap 150 as our replacement for MON100.
By investing in Midcap150, we will now have exposure to India’s top 250 listed companies. The index is currently down by -18% from its recent peak in Oct 2021. We have added MID150BEES to our portfolio, which has an AUM of ~482 Cr, an expense ratio of 0.2%, and decent liquidity (20-day Avg volume 1.3 Lac).
The idea is that you have to invest a little every month over the ETFs, investing regularly.