Sharekhan’s InvestTiger Stock Baskets Beat Benchmark Returns: What Should Be Your Investment Strategy?

You may invest in stock baskets that have been chosen by research specialists with years of expertise using the Sharekhan InvesTiger app. The research specialists frequently update each stock basket, and you are immediately notified of any updates of Buy/Sell alerts via SMS or on your InvesTiger app.

The Sharekhan internal research base is used to create the reliable hand-selected stock baskets included in the InvesTiger app. Eight well-picked stock baskets are currently available on InvesTiger, divided into Premier and Thematic strategies. According to an interview conducted by BNP Paribas with Sharekhan's Senior Vice President and Head of Capital Market Strategy, Gaurav Dua, Sharekhan's InvesTiger makes long-term investing simpler for regular investors. Let's know how.

How each portfolio/stock basket is different from the other?

Currently, the InvesTiger offers eight curated stock baskets spread over two categories, Premier and Thematic portfolios. In the Premier category, we offer balanced portfolios in large-cap, multi-cap, flexi-cap and midcap/small-call space. While in the thematic category the objective is to rise certain macro trends and investment themes like Economic Recovery Picks, Green Portfolio, MNC Picks and Exports Picks, said Gaurav Dua.

What is the investment philosophy/guiding principle the team follows regarding the construction of each stock basket?
In curated stock baskets, we invest only in companies that are well research by our in-house research team. The 12-member fundamental research team has active coverage on 228 companies across market breath and sectors. Along with the research team the investment team shortlists the 10 stocks for each of the stock basket based on the defined mandate and rules of each stock baskets.

Moreo importantly, the stocks are tracked actively and investors are given research alerts on their holding to take timely decision which is essential part of a disciplined investment approach. Hence, expect from one stock baskets, all the rest of seven stock baskets are beating their respective index by 4-12% since inception after factoring the transaction cost. Apart from stock picking, we also focus on top down approach which means having exposure in right sectors depending upon macro conditions. This helps us invest in high quality stocks with structural growth outlook resulting in handsome gains for the investors, said Gaurav Dua.

How often the constituents (ie the stocks) of each basket are rejigged?

All stock baskets are low churn products with focus on investment for wealth creation over a period of time rather than short-term trading or chasing momentum. Generally, the stock baskets have an average of 5-6 trades annually. However, the churn rate also depends on market conditions. In a trending market, the churn is higher as number of stocks hitting the target prices go up. On the other hand, the churn rate tends to be relatively lower in a rangebound market conditions, said Gaurav Dua.

How many investors are benefitting from the app?

We have seen very enthusiastic response from retail investors and have close to 11,000 clients have invested in the stock baskets since the introduction about a year back. Unlike mutual fund, the curated stock baskets are offered as a non-discretionary product and no transaction can be done without the approval of retail investors. Also, all the rebalancing alerts are backed by research note and it helps investors to understand the reasons for the suggested action to be taken by them. Hence, the objective of curated stock basket is not only help investors generate index beating returns but also empower investors to understand and effectively use research to tap the promising investment opportunities in the Indian equity market, said Gaurav Dua.

The market has reached new highs. In such a scenario how the baskets will give such high returns in the coming year?

Markets have touched all-time high levels lately. But are nowhere close to all time high valuations. That's because Nifty has spent almost 20 months in range of 16,000-18,000 level before breaking out. And in this period, the earnings have grown by 28-30%; thereby resulting in moderation of valuation multiples. Nifty is trading at 15-18% cheaper valuations are compared to October 2021.

Having said this, the second half could be tough for developed economies as impact of rate hikes starts to reflect on consumer spending, real estate and other key constituents of economy. Domestically, the elections in key states and run up to general elections next year could result in some volatility. Given the healthy growth in earnings and expected multi-year economic upcycle in India, the volatility for any domestic and global reasons would be an opportunity to accumulate quality stocks at better price points for handsome returns over the next 2-5 years, said Gaurav Dua.

How risk is managed?

Generally, we have observed that retail investors do not have the understand or time to track all the information and take timely action. This leads to sub-optimal returns and retail investors end up holding huge number of stocks with most of them are part of portfolio because the stocks are trading at a loss to buying price rather than fundamental reasons. We, at Sharekhan, have years of research and investment expertise to understand the macro cycle and invest accordingly in structurally growing sectors and stocks.

More importantly, we follow a disciplined investment approach which means taking timely action based on research alerts along with research note to justify the suggested action. Hence, InvesTiger is an initiate towards empowering retail investors by leveraging on our in-house research expertise in a disciplined manner. Also, the app-based investment solutions on InvesTiger are highly cost effective with levy of just standard brokerage and no other fee, lock-in period or any kind of additional charges, said Gaurav Dua.

What new things Sharekhan is planning to introduce in the InvesTiger app?

To further widen the range of investment solutions for retail investors, we plan to introduce ETF basket and three solution oriented mutual fund baskets. Our endeavour is to continuously innovative both in terms of better features and range of offerings, to enhance the customer experience and provide a cost effective & a delightful investment journey to retail investors. Investors can start to invest at a relatively small ticket size of Rs50,000 lumpsum initial investment currently which we intend to bring down to Rs20,000-25,000 by introduction of ETF and mutual fund baskets, said Gaurav Dua.