The Indian Equity market was on a rise in calendar year 2017 with the key indices hitting all-time highs. The Benchmark Index, Nifty, returned 28.6% for the year in comparison to the 33.5% of the Scripbox Equity Funds portfolio.
For our regular SIP investors, a monthly SIP in Scripbox recommended portfolio would have returned 27.0% this year against 22.0% for a SIP in the Nifty.
Overall, we believe that the equities continue to be the best option among investable assets for long term investing and we are quite confident entering 2018.
1. The core idea of Scripbox :
The objective of the Scripbox portfolio of equity funds is to select a portfolio of 4 Diversified Equity funds that have a consistent track record of performing better than the Nifty and therefore expected to do better than the Nifty.
We had the following 4 diversified equity funds in the 2017 portfolio of equity funds. This Report card is based on the performance of these funds from Jan 1, 2017 till Dec 29, 2017.
- SBI BlueChip Fund (G)
- ICICI Prudential Value Discovery Fund (G)
- Mirae Asset India Opportunities Fund (G)
- L&T India Value Fund (G)
The analysis of the absolute performance of the Scripbox equity portfolio is a combination of the performance of the Nifty, and the performance of the portfolio relative to the Nifty.
2. Nifty Performance:
- In calendar year 2017, the Nifty provided return of 28.6%
- Over the last decade, the Nifty has returned a CAGR of 5.5%*.
- We continue to believe that the case of Indian equities remains strong and equities as an asset class will continue to outperform fixed income over the long run.
Note: * The last decade's return is highly skewed by the dramatic drop of 51.8% in 2008 - the first year of the decade. However, 15 year CAGR for Nifty is 16.3%.
These are returns based on a one-time investment, for returns for a SIP investor, kindly refer section 6 below.
3. Nifty Relative to Other Benchmarks
In 2017, most benchmarks Index gave the return between 28% to 36% except Midcap and Small cap Index which gave returns of over 50%.
Note: Performance from Jan 1, 2017 until Dec 15, 2017.
4. Scripbox Portfolio of Equity Funds
Three funds in the Scripbox portfolio outperformed the benchmark index and the ICICI Prudential Value Discovery Fund (G) underperformed.
5. Scripbox Portfolio compared to other funds
The top 25 funds by assets delivered an average return of 32.8% in the current year and the Scripbox portfolio performed in line at 33.5%.
6. Returns for SIP investors
Assuming a SIP on the 10th of each month, the XIRR returns for a SIP investor was 27.0% in the Scripbox portfolio of equity funds, compared with 22.0% in the Nifty in 2017.
The SIP out performance of 4.9% was slightly higher than the absolute out performance of 4.8%.
This is in line with the track record of Scripbox equity portfolio over the long term. SIP returns in the Scripbox equity portfolio have been better than the Nifty over all holding periods.
This annual performance is similar to the annual performance in 2016 and in the years prior to that. You can read last year’s report card here.