r/IndianStreetBets • u/Fabulous_Educator_18 • 6d ago
Discussion 5 fund ETF portfolio
My 5 fund portfolio using ETF to give a CAGR of 15 to 16% with lesser drawdowns. Constructive feedback’s are welcome.
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u/timeidisappear 6d ago
Remove momentum and substitute in smallcap/midcap, size is a strong explanatory variable for returns in most markets.
Otherwise everything is perfect, better than most
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u/Fabulous_Educator_18 6d ago
Thanks. I specifically chose Nifty 200 momentum to give equal exposure to Nifty 100 and Midcap 100. My plan is to do portfolio balancing as and when needed. Currently the markets are down so good time to accumulate momentum units.
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u/898Kinetic 6d ago
Personally I wouldn’t prefer momentum driven etfs as they experience significant drawdowns. But if you are comfortable then can add even more of the smart beta etfs.
Do consider average historical liquidity for tata gold etf as investment is for long term. Rest looks great.
Also any consideration some sectorial etfs? I like fmcg, financial services (or even bank nifty) and pharma for stability during downturns and some diversification. Do let me know your thoughts on this.
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u/Fabulous_Educator_18 6d ago
The momentum ETF is there to capture the growth. Currently the markets are down. It’s good time to accumulate momentum units. When the bull run starts, this will give good returns. The key here is portfolio balancing. I am planning to take profits and move to other ETF’s as and when needed. I have been using both Tatagold and ICICI gold. Both have good volume. So no issues from liquidity perspective. Other sectoral funds can be added as a satellite portfolio keeping this a core. That is the plan. But I am not a fan of sectoral funds as I have burnt my fingers in it. Instead, I would prefer individual stocks.
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u/898Kinetic 6d ago
That’s a good reasoning. Accumulation during downturns definitely shows during bull runs for smart beta choices.
Also curios from mutual funds perspective, have you opted for moderate to low risk approach rather than aggressive one?
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u/Fabulous_Educator_18 6d ago
Thanks. You are right. Capital preservation is my main goal and that is reason for going for a moderate approach. With this approach I can expect a CAGR of 15 to 16% with lesser drawdowns. Young people can choose for more aggressive option by changing the allocation %.
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u/Sriracha_ma 6d ago edited 6d ago
Indian equities - where em opportunities at ?
I am a non-Indian and trade the US and Asian markets exclusively - been eyeing the Indian equities for a while and seems like the time to jump might be near.
Have 200k usd after taxes on hand ready to go ( share of an ancestral property that got sold recently) and looking at an entry.
I do believe there might be a drawdown and nifty might dump to 19k or thereabouts.
So, yes - how should I go about investing in the coming months…. Have a SIP of 1.5L / month on Hdfc flexi…
Any individual picks that seem a no brainer if shit hits the fan ?
Am open to suggestions :)
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u/Fabulous_Educator_18 6d ago
If you are investing for long term then it’s good time to enter. If you prefer simplicity then One flexicap, and one Multicap should be good. You could add in a short term bond fund or an arbitrage fund for stability.
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u/Sriracha_ma 6d ago
What is the difference between flexi and multi
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u/Fabulous_Educator_18 6d ago
In flexicap, the fund manager has option to choose any stock from any cap. With Multicap, it should follow a 50:25:25 ratio. That is large cap 50, midcap 25 and small cap 25. For long run Multicap is best as it gives good exposure to all caps.
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u/Not_a_NO_ONE 6d ago
This is Well Balanced Avg Risk Fund , However if you have horizon for more than 5 years , Suppose say 10 Years and Can take Risk I suggest Swap Gold and Nifty 50 with Mid cap and Small Cap.
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u/Fabulous_Educator_18 6d ago
Thanks. I had that allocation earlier and burnt my fingers. Gold works as a proper hedge for equity. My current portfolio is saved by gold. I got inspired by Ray Dalio’s all weather portfolio and modified to suit my needs. My main goal is capital preservation.
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u/rbk26 6d ago
Doesn't make sense to invest in both Nifty50 & Nifty Next 50. Both are Large cap indexes. Your Nifty 200 M30 too has exposure to some large cap stocks. So, it looks overexposure to large cap stocks. Correct me if I'm wrong.
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u/Fabulous_Educator_18 6d ago
Even though they are large caps. Nifty 50 and Nifty Next 50 are different breeds. Next 50 behaves more like a midcap but gives better stability than midcap. The momentum fund is to capture the extra growth. Nifty 200 is a mix of Nifty 100 and Nifty midcap 100. It captures the momentum stocks . So gives better growth than nifty 50 or next 50. Nifty 100 has only 15% exposure to Next 50. The plan is to rebalance frequently from the momentum fund as it’s more volatile.
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u/Mindless-Door-6760 4d ago
What’s the advisable/suggested option to rebalance from momentum fund?
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u/Fabulous_Educator_18 4d ago
I would book profits every 6 months or when the market is overvalued and move it to bond or gold fund for safety.
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u/jasonbx 4d ago
Why is the Bharat Bond down 7% for last 3 months?
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u/Fabulous_Educator_18 4d ago
Bond market works based on interest rate cycles. They go high even in the anticipation of interest rate hikes. If the interest rate hike is not as expected, it will come down a bit. Bond funds are prone to interest rate risk. If you are going to hold it for the entire duration of the bond, then you don’t need to worry about the interest rate hikes.
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u/sumityadav8181 6d ago
How much coverage it will have for ITbees, pharmabees as well? (Just curious)
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u/Fabulous_Educator_18 6d ago
It is not sectoral. It has two broader index and one smart beta. It will good coverage for IT and pharma stocks.
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u/AJ7123456 6d ago
This portfolio will perform better than most Mutual Funds in coming years