Year-end Review. A recap of ‘Portfolio’ in 2019: Offering more to the investor

The year 2019 has been extremely challenging for investment advisors and analysts.

With the ongoing economic slowdown and weak global growth impacting demand, corporate earnings remain on the back foot.

The larger stock universe suffered as a result. Of the entire listed universe, over three-fourth of the stocks fell in 2019. But prices of a handful of large-cap stocks surged, making the returns of the Nifty 50 and the Nifty 500 indices look good.

It was also a year in which investors in debt received a rude shock, making them aware about the risks inherent in these instruments. Corporate defaults led to downgrades of debt instruments, leading to NAVs of debt mutual funds getting marked down.

This caused a flutter among investors who had till then believed that debt mutual funds were akin to bank fixed deposits.

With residential real estate prices, too, largely heading lower, gold was the only bright spot in investor portfolios.

We navigated through this torrid year by broad-basing our recommendations, including safer fixed-income instruments in our product recommendations and allocating considerable space to investor education.

Here are a few highlights of our performance in 2019.

Daily portfolio

A common plaint of many of our readers has been that it is difficult to read the entire content of Monday’s ‘Portfolio’ in one day. To address this dilemma, we began releasing some of our personal finance content over the weekdays — from Tuesday to Friday — from October 2019 onwards. This ensures that you get Portfolio’s personal finance content through the week, in small doses.

Besides personal finance content, the weekday ‘Portfolio’ section also contains news analysis, interviews with market experts, data on fixed deposits, loans, insurance premiums and so on.

Diversification

Given the exigency to diversify investments across asset classes, we introduced a column recommending fixed-income securities. In this column, fixed deposits of regular and small finance banks, tax-free bonds and small saving schemes are analysed and recommended. This column is aimed at investors with a low-risk appetite who want steady returns.

We have dedicated a larger part of the ‘Portfolio’ to insurance products — covering health, life and other general insurance products. We are perhaps the only media house to intensively analyse and give our recommendations on the insurance products in the market. To give a comprehensive solution to families on managing their finances, the Financial Planning column was introduced in 2019. This column looks at goal-based investing that optimises the income earned.

Another popular feature that was included in ‘Portfolio’ this year was ‘Excel’ling that teaches investors the use of Microsoft Excel functions required for managing investments in financial planning.

To go beyond stock recommendations, we have started giving sector views, quarterly results analysis and deep-dive analysis of stocks, following material news developments.

The commodity segment has featured a number of stories highlighting the plight of the farmers and the difficulties faced by them at every stage, in getting the produce from farm to fork.

Our calls

As explained above, 2019 was not too conducive to stock-picking. When we consider the stock recommendations given in Portfolio between January 2018 and June 2019, a total of 152 stock calls were given, out of which 140 were ‘buy’ recommendations and 10 were ‘sell’ recommendations, with two ‘holds’. Our ‘buy’ calls in the primary offers of HDFC AMC, Fine Organic, CreditAccess Grameen, Polycab India and Midhani delivered strong returns, above 70 per cent. The ‘buy’ call on Bajaj Finance in April 2018, Prestige Estates in October 2018 and IPCA Labs and MCX in late 2018 also delivered good returns.

Our real-estate calls in Prestige Estates, Brigade Enterprises and Godrej Properties in late 2018 and early 2019 also proved timely.

The sharp decline in media, pharma and auto stocks has made our calls in these spaces go awry. But we have given follow-up calls and analysis, wherever possible, to guide you on the follow-up action needed.

Of our sell calls, the call to sell PC Jeweler in the buyback offer in May 2018 has worked well, with the stock declining 88 per cent since then.

The call to sell YES Bank in April 2019, IDBI Bank in March 2018 and Lumax Industries in March 2018 have also performed well, with the stocks losing 79 per cent, 53 per cent and 46 per cent, respectively, from our recommendation. The underperformance of most equity mutual funds vis-à-vis their benchmarks dragged the performance of our fund calls in 2019. The performance of hybrid funds was also roiled due to the performance of their equity holdings. But over 90 per cent of our calls in debt mutual funds have worked well; with these funds managing to beat their benchmarks.

Looking ahead

The focus on giving you research-driven, objective and actionable content will continue in the coming years. The effort to broad-base our offerings by covering all new instruments targeted at retail investors will continue. We will also continue to keep you informed about all the developments on the regulatory front that influence investments.

We will strive to bolster the online offering of Portfolio. The daily rupee call, the Nifty 50 intra-day call and stock-trading calls are currently published exclusively online. More such online content will be introduced. We look forward to your feedback through social media and our website.

Happy investing in 2020!

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