Rupeeting Equity Rebalance - April 2022

💡 Rebalance: (v) to change the amount or level of one or more things in order to improve a particular situation

We launched our five thematic equity portfolios in October 2021. They are all based on unique themes that we believe in.

Since we launched, the markets have been volatile. Overall the Nifty 50 index from mid-October 2021 is down 3%, with major swings in the interim (a >15% range of movement).

Our performance in the meanwhile:

• 3 of our portfolios have been outperforming the Nifty, and

• 2 portfolios are under-performing compared to the Nifty

Going forward, we are committed to our goal of significantly beating the markets, and generating disproportionately higher returns for our investors in the long-term.

We’ve been seeing some positive signs already. Over the last month, here’s what performance on our portfolios looks like:

1. Rocketship: +6%

2. Monopolies: +15%

3. Disruptors: +15%

4. Bread & Butter: +7%

5. Value Migration: +10%

This against the Nifty, which is up 9% in the last month.

Changes in the portfolios

Portfolio	Deletions	Additions
Rocketship	Jubilant FoodWorks Garware Fibres Persistent Systems	Jubilant FoodWorks Garware Fibres Persistent Systems
Monopolies	Quess Corp	Praj Industries
Disruptors	-	-
Bread & Butter	-	-
Value Migration	-	-

Why the changes?

Rocketship

Deleted	Reason
Jubilant FoodWorks	​Recent leadership flux has weighed on the stock Consumption stocks haven’t been doing well in recent market conditions
Garware Technical Fibres	Raw material prices may come under pressure because of crude-linkage Additional pressure from GST rate increases by the government on technical textiles Cutting losses on the stock not performing well
Persistent Systems	The stock has performed very well: 3 month returns of 12% and 6 month returns of 27% Booking profits
Added	Reason
​Lakshmi Machine Works	1 of 3 manufacturers globally to produce the entire range of spinning machinery Has also expanded into CNC machine tools, precision castings and manufacturing aerospace components - all areas with high-growth potential Has been growing revenue and profits in multiples
HDFC Life Insurance	Growth across all segments; especially ULIPs Hiked prices by 15-25% in retail term insurance, and is likely to continue doing so Leads the industry with product innovation, and maintains a balanced product mix
Sundaram Fasteners	The Indian commercial vehicle space is expected to rebound after 2 bad years Has industry-leading operating margins, negligible debt and superior return ratios

Value Migration

Deleted	Reason
Quess Corp	Poor performance in the December-ending quarter Recent leadership flux Ambiguity over a tax-law that was benefitting the company so far
Added	Reason
Praj Industries	Strong demand for grain-based ethanol Praj will be a major beneficiary of the government's focus on ethanol blending Strong order inflow, and order book

Why aren’t we changing anything in the other portfolios?

We had made a few changes in the Disruptors portfolio mid-quarter. We took advantage of the grave fall in the markets, and shot out an opportunistic rebalance. You can find more details on that here: https://www.rupeeting.com/post/disruptors-portfolio-rebalance

For Monopolies and Bread & Butter, we are happy with the current allocation. If we do think there is a need for rebalance mid-quarter or at the end of next quarter, we shall push one out. That said, we do monitor all our advise very closely on a daily basis.