Investors in customized portfolios are notified when to buy, sell, or alter the basket. The portfolio strategy could be based on a variety of trends or ideas, such as regional, factor-driven, or a mix of large, mid, and small company stocks. Platforms such as Smallcase and WealthBasket provide them. Online brokers can provide access to them.
Investors seeking higher equities returns may want to consider highly specialised compiled portfolios assembled and managed by authorised financial advisors and boutique investment managers. These stock baskets are gaining appeal among individual investors who wish to invest in equities other than through mutual funds but lack the skills to identify stocks, according to financial planners.
On a variety of venues, a number of seasoned stock market participants offer customised equity products. Sunil Singhania of Abakkus, Devina Mehra of First Global Finance, Jitendra Parmar of Aurum Capital, and Niteen Dharmawat of Aurum Capital are among them. Due to the rising demand for such products, other registered investment advisors have entered the market with similar services. To attract more investors, some of the players have maintained the entrance point as low as $1,000.
"For first-time investors, guided equity is a good approach to participate in the markets since it gives experience and diversification," said Anupam Guha, head of ICICI Securities' private wealth management. "They can choose a curated portfolio, a mutual fund scheme, or an ETF based on their risk tolerance and preferences, as well as their investment time frame."
Investors in curated portfolios are notified when to buy, sell, or change the basket. The portfolio style could be based on a variety of themes or ideas, such as sectoral, factor-driven, or a mix of large, mid, and small company stocks. Platforms such as Smallcase and WealthBasket provide them. Online brokers can provide access to them.
"Demat accounts have exploded in popularity in recent years, despite the fact that few retail investors are familiar with direct stocks. Curated portfolios instil discipline and methodical investing, resulting in long-term wealth creation "WealthDesk, a platform that delivers curated portfolios, is founded and led by Ujjwal Jain. Over the last few years, the number of demat accounts has more than doubled, from 4.05 crore to 9 crore.
Analysts say customised portfolios make sense for investors who can't buy AIFs or PMS but want to diversify their stock investments beyond plain vanilla equity mutual funds.
"Because the shares are held in the investor's demat account, this method of investing allows for greater investment control. Subscription-based expense ratios may be less expensive than mutual fund expense ratios for substantial quantities of money invested "HDFC Securities' head of retail research, Deepak Jasani, agrees.
Curated products, according to Jasani, may be riskier than mutual funds because of their weaker diversity. They also have a lower tax efficiency than mutual funds. A mutual fund rebalancing a stock portfolio is tax-free for the investor, whereas there will be a tax liability in this situation.
While the top Smallcase achievers have given returns ranging from 66 to 121 percent over the last year, outperforming the NSE Small Cap 250 by 33 percent, financial advisers advise investors to avoid making judgments based on historical performance. Small-cap stocks are heavily weighted in curated portfolios, which do well mostly during bull markets.
"It is critical to identify the research provider. Choose someone with a proven track record and a decent reputation "Jitendra Solanki, a SEBI-registered financial advisor, expressed his opinion.
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