The three portfolios with large equity exposures are in the red following the downturn.
But since they invest via SIPs, the losses are not very high. The two conservative portfolios generated positive returns, but not as much as expected.
1. WEALTH MAXIMISER: Downside of aggression
Debt and others: 2.7%
With nearly 50% of its corpus in mid- and small-cap stocks, the portfolio is in the red, but not too much.
In the past 10 months, the NSE Midcap 100 has fallen 9.4% while the NSE Smallcap has declined 21.6%. But the broader NSE 500 has risen 2%. In this backdrop, the 3.2% absolute fall in the Wealth Maximiser portfolio doesn’t look too bad. SIPs, obviously, cushioned the impact of the steep fall in small and mid-cap stocks.
2. WEALTH BUILDER: Hit by drop in financial sector
Debt and others: 4.1%
Large-cap stocks remained steady, but the 40% exposure to financial sector stocks may prove costly.
Given that the NSE 100 has risen 6.5% since 1 Dec 2017, the largecap oriented Wealth Builder portfolio should have been in the black. But 40% exposure to financial sector stocks pushed it into the red. If the carnage in NBFC stocks continues, the cut may get deeper. It is here that the SIP advantage becomes apparent to investors.
3. STABLE WEALTH: Balanced exposure contains loss
Debt and others: 41.5%
Lower exposure to equity cushioned the portfolio against large losses.
The three hybrid funds in the Stable Wealth portfolio act as a cushion during market downswings and boost returns when equities are on the rise. The short-term debt fund keeps working quietly. This balanced approach delivers consistent returns. New investors who are not used to volatility will find it especially useful.
4. WEALTH SECURE: Low return at low risk
Debt and others: 67.5%
This conservative portfolio has managed to generate a small but significant return for investors.
Meant for conservative investors, the Wealth Secure portfolio has performed well given the market condition in the past 10 months. The only fund to lose money in this portfolio is the pure equity ELSS scheme. Even this scheme has not lost too much because SIPs help diversify the investments across time.
5. INCOME GENERATOR: Returns hit by rising rates
Debt and others: 92.5%
Continuous rise in bond yields depressed returns of the portfolio. Likely to do well in the coming months.
Returns from the debt funds have been lower than expected due to the consistent rise in bond yields. The future looks brighter as research shows that when bond yields are 8-8.5%, debt funds deliver close to 8-9% returns in the following year.
Returns as on 24 Oct 2018. The portfolios were launched on 1 Dec 2017 and all SIPs and withdrawals are assumed to be done on the first trading day of every month.