Smallcase stock portfolio themes – Should you opt them?
I was reading Businessline couple of days back and heard about Smallcase stock portfolio themes being offered by Zeroda stock broker. This is nothing but a investment idea transformed into portfolios. These theme based stock portfolios became live from July, 2016. Smallcase is the company which creates stock portfolios almost every week. I was researching about Smallcase and found the concept was interesting. What is Smallcase stock portfolio themes all about? How small case themes are being created? Which stock broker is offering Smallcase stock portfolio themes now?
How do Smallcase stock portfolio themes work?
- These are not stock tips services. Smallcase creates stock based portfolio almost every week.
- It brings market themes and trends based on predefined category.
- Themes are based on a top down approach. E.g. If the monsoons are good, smallcase created a set of stocks as Monsoon stocks which are expected to perform well.
- Smallcase can also help to manage periodic updates, tracks stocks and it updates the portfolio every quarter.
- Stock themes include long term trends, government reforms, sectoral exposure, GST stocks, etc., New smallcase themes are added every week to have freedom in choosing the stock portfolio.
- Each theme is based on 20 stocks reflecting an investment idea.
Also Read: Best Real Estate Stocks to invest in 2016 now
What are features of Smallcase stock portfolio themes?
- Themes based on trends and hence good to have such stock portfolios.
- Portfolios give diversified and not dependent on a single set of stocks.
- Smallcase charges a flat fee of Rs 100 per theme. It is a low cost investment idea.
How to invest through Smallcase?
Currently Zerodha stock broker only is offering smallcase themes. You can go through Zerodha if you would like to consider these themes.
What do Smallcase stock portfolio themes consists of?
Intelligently weighted 20 basket stocks are reflected in each smallcase theme. It includes GST Stocks, monsoon stalks, Private banks, sector exposure I high growth industry stocks etc.,
How is each Smallcase theme is measured?
Each smallcase value is called the index. At inception it is set to 100. Current value shows how it is moved. E.g. at inception if it shows 100 and it moved to 120 in 1 year, returns in 1 year is 20% (20 over 100).
How Smallcase stock portfolio themes are created?
Every week, one small case theme is created based on various trends. Once they identify the theme, they do top down approach about sectors, substitutes and best stocks to be part of that theme. Once the stocks are finalized, the theme is floated to investors. One new theme is being created every week by smallcase.
Are there are any hidden charges in Smallcase stock portfolio themes?
There is no minimum investment to be made in small case theme based stock portfolios. Smallcase charges flat Rs 100 per theme. No fees for exiting, rebalancing and managing smallcase portfolio. Currently this concept is being partnered and offered only thru Zerodha. They would charge you through their Kite web based platform.
What are some of the sample themes?
1) Small case – Government Reforms
This theme focuses on GST Opportunities. Currently the index shows 292. Returns in last 1 month are 4.8% and returns in last 1 year were 21%.
2) Small case – Smart Cities
This theme focuses on stocks that benefit from Smart Cities. Returns in last 1 month are 2% and returns in last 1 year were 17%.
3) Small case – Banking Privately
This smallcase theme focuses on private banks, which has potential to grow. Currently the index shows 279. Returns in last 1 month are 10% and returns in last1 year were 43%.
4) Small case – Cash of Titans
This theme focuses on cash rich companies which has potential to grow. Currently the index shows 250. Returns in last 1 month are 11% and returns in last1 year were 29%.
5) Small case – Bargain buys
This theme focuses on stocks available at low prices. Currently the index shows 242. Returns in last 1 month are 8.5% and returns in last1 year were 36%.
Also Read: Good midcap stocks to invest now
Should you consider Smallcase stock portfolio themes?
Though this is a nice concept, it has just evolved. However, smallcase themes show that the index has already reached 250 to 290 which is surprising. I heard this is still in beta version, partnered with Zerodha and hence not being partnered with other stock brokers as of now. These themes are available at very cheap prices of Rs 100 per theme. One should review these themes before they start investing in stocks specified in such themes.
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Suresh
Smallcase stock portfolio themes – Should you opt them
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Suresh Sir!
Could you please review Options Trading Platform called sensibull by Zerodha?
regards,
Deepak p
I am currently using smallcase by Zerodha, as you said it is an interesting concept, however time will tell if we get benefit out of it or not.
For a layperson how would I as an investor know what to do when Zerodha does portofolio adjustments quarterly what do I as the layperson have to modify in my portofolio.
Conrnelio,
I was talking with Small case representative yesterday about the same matter. It is upto us if you want to go with the modification or not. If new stocks would fit in the idea then those will be included. Or may be existing Stocks which may not now fit into the idea of smallcase would be removed. but it is solely your choice.
Hope this helps.
Regards,
Deepak P
Hi Suresh
One question on SmallCase, you said that they review the portfolio each quarter and change the theme and you have to make change yourself(I guess only if you deemed fit)
My question if I change the theme, will Short Term Capital Gain ( if done based on their suggestion within a year of purchase of a Small case) be not applicable in such a case?
Thanks
I understand it is only for Zerodha account holder?
What type of analysis I need to do it is similar to theme based mutual fund and how it is different from mutual fund
it is similar to mutual fund. However, as an investor, you just invest in mutual fund and relax. Here smallcase team would review them every quarter and make adjustments to the theme and accordingly you need to modify your portfolio too. Net summary, you need to keep an eye on smallcase theme based stocks, however in mutual fund, you invest and leave it, rest would be taken care by fund manager. Investment decision could be right or wrong in both cases
Nice Concept from Small case and good to hear that they partnered with Zerodha
How can it start, what is benefit,minimum start amt for this.
No minimum amount. You can login to smallcase.com and click on any of the theme and see the stocks under each theme. You can directly invest in such stocks from your stock broker. If you have zerodha account you can simply login and invest thru small case which would automatically invest if you just specify the amount.
It looks like there will be a small case fee other than brokerage as per their website 2.5% or Rs.100 which ever is minimum.
https://www.smallcase.com/meta/fees
Thats correct Sri. If you go through Zerodha, you need to pay brokerage fees applicable + Rs 100 per theme for execution. However, you can login to smallcase.com login and you can view the stocks under the theme without any charges