Smallcase is a fintech platform that combines the best of discretionary investing and professional manager input into an inexpensive package. On this platform, the SEBI-registered analysts and experienced investment managers create model portfolios based on specific ideas, themes, objectives or investment strategies. In traditional investing, equity investors must do their own fundamental and technical research to analyse and carry out the stock picking process. smallcase investing obviates the necessity of the investor depending on his own research insights. Smallcase investing is particularly helpful in the case of novice investors who are new to equity market investing.
Smallcase investing, created by three IIT Kharagpur engineers in 2015, brings curated expert ideas to you. Retail investors can access professional manager inputs at a reasonable cost. You get access to a professionally curated basket of stocks built around an investment strategy or a theme for an affordable price. Please note that smallcase provides only the portfolios. The benefit of Smallcase is that it allows you to invest small minimums, even as low as Rs 500. Investors should invest using their respective broker accounts.
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Analysis of Smallcase
Here are some critical analyses of different aspects of Smallcase:
1. Best smallcase
The best smallcases are judged based on their performance track record and diversification potential. The best performance is also evaluated by using the returns of the particular smallcase over the medium to long term.
There are different categories of smallcases which are filtered purely on their performance. Of course, each category will have smallcases that outperform others because of the manager’s alpha.
2. All Weather investing
All Weather Investing is a smallcase category which diversifies its investments among different asset classes like equity, fixed income and gold. This smallcase has the best performance with a CAGR return of 25.72% over six years.
3. Dividend Stars and Aristocrats
Dividend aristocrats look at creating portfolios of companies that offer high dividend yields in addition to capital appreciation. These smallcases have given a CAGR return of 22.69% and 21.13% over six years.
4. IT Tracker
IT Tracker Smallcases look primarily at investing in the companies that belong to the NIFTY IT index. This Smallcase has a CAGR return of 20.19% and mainly invests in carefully selected IT companies.
5. Smallcase Subscription
When you subscribe to Smallcase, you can view the constituent stocks and ETFs in the selected Smallcases. The professional managers responsible for managing a particular Smallcase also send periodic rebalancing updates, which are used to rebalance the small case portfolio using a single tap through your broker account.
You can automatically buy and sell specific securities in pre-defined proportions using a one-tap on your broker platform. Fees are AUM-based or flat fee-based. Smallcases are offered free on the Dhan platform. All other brokerage charges, Demat and government taxes apply at standard rates.
6. Techniques for making smallcase investments
- You can invest in Smallcases by bifurcating it into a core and trading portfolio.
- Use standard themes like value, growth, dividend play or sectoral themes to choose your Smallcase portfolio.
- You can even analyse Smallcases’ past performance and volatility and select the one that best suits your risk-return profile.
- As a seasoned investor, you can even curate your own smallcase.
Smallcase investing involves investing in an idea, a concept which is much easier than stock picking. You are presented with a pre-prepared strategy, which makes investing very easy. You have complete control over your broker account in deciding which stocks to buy or sell, and the portfolio can be altered to suit your financial needs. You achieve portfolio diversification with inputs from seasoned investment managers using their tried and tested strategies. When you rebalance your portfolio, you attract tax liability when selling stocks. Investing in smallcases may not be suitable if you are a passive investor using a buy-and-hold strategy.
Disclaimer: This blog is not to be construed as investment advice. Trading and investing in the securities market carries risk. Please do your own due diligence or consult a trained financial professional before investing.