fbpx
Skip to content
  • Investing Insights
  • smallcase Rationales
  • Inside smallcase
  • Postweek Reports
  • Subscribe

A step towards making smallcases more transparent

share: Icon-Whatsapp Icon-Twitter
Subscribe
Inside smallcase ,  

A step towards making smallcases more transparent

Author Anugrah Shrivastava
Published March 23, 2021
Share
Icon-Facebook Icon-Twitter Icon-Email
Collections Announcements
Reading Time: 3 minutes

At smallcase, we understand that one of the most basic yet most important criteria for any financial product is transparency. We believe that our users should be fully aware of what they are investing in and what they should expect from such investments. Working in that direction, we’re happy to announce a slew of new and improved features.

At the end of 2019, we had introduced a lot of new features like valuation ratios, market-cap distributions, the option to download full index series of the smallcases, etc. to make smallcases transparent. You can check them out here.

Here are 3 new features that we worked on for you:

1) Past performance chart of a smallcase is now on live data only [Updated on 25th April, 2022] 

We used to show the backtested data in the Past Performance charts of smallcases, as it would help users analyze the strategy performance across longer time periods. Now, we have completely removed the backtested data from the Past Performance charts as well, to ensure that you don’t get confused between the live and backtested data while looking at the Past Performance chart. 

Past Performance graph of a smallcase

Now, all the charts and numbers shown anywhere on the platform are only based on live data. If you are still keen to see the historical Manager’s backtested data of the smallcase, as calculated by the manager, you can find it on the factsheet of the smallcase

2) We are shifting from ‘Risk’ to ‘Volatility’

In the financial world, risk can be interpreted in different ways – which often caused our users some confusion. Until now, we classified different smallcases on the basis of their risk. So, there were smallcases that were Low Risk, Moderate Risk and High Risk.

A ‘Low Risk’ smallcase was essentially one whose expectations of volatility in investment value was low. Similarly, a ‘High Risk’ smallcase was one with high expected volatility. However, we understood that this might be confusing for an investor to read and interpret in the way that we intend. Hence, we are now shifting from using the word ‘Risk’ to using ‘Volatility’. We believe that this label would be easier to understand and also conveys the idea correctly. Essentially, volatility represents the expected fluctuations in the smallcase value.

Volatility will be calculated based on live data only. This means that no backtested data is taken into consideration while calculating volatility. For more on how smallcase Volatility is calculated, read more here.

3) Improving the CAGR calculation methodology

Like Volatility, CAGR will also now be only calculated based on live data.

For smallcases that have been live for less than a year, CAGR will show the absolute performance of the smallcase during this period. 

For periods greater than a year, CAGR would reflect the compounded annual growth rate calculated using the regular formula.

Factsheet of a smallcase

The idea behind including both – backtested and live performance, in the CAGR calculation was to give our users a better idea of what would be the expected performance of the smallcase over longer periods of time consisting of multiple economic cycles. However, this was not interpreted by our users in the way that we intended. Thus, we would not be including any backtested/simulated data in the CAGR calculations.

We hope these changes have made smallcases even more transparent than before. Feel free to share your suggestions on how we can further improve the transparency on the smallcase platform.

Author

  • Anugrah Shrivastava

    Founder & Head - Investment Products at smallcase. Loves Fridays.

    View all posts

CAGRliverisksmallcasesmallcase featuressmallcase transparencytransparencyvolatility
Icon-Facebook Icon-Twitter
Download App

Anugrah Shrivastava

Icon-facebook Icon-Twitter

Founder & Head - Investment Products at smallcase. Loves Fridays.

You may want to read

​
smallcase transparency

Transparency is the currency of trust

At smallcase, we believe transparency is one of the most important characteristics of a financial instrument. Working in this direction,...

Up, Close, and Personal (Finance)!

  • Previous postHow is smallcase Volatility calculated?
  • Next postCovid-19 second wave threat spooks investors

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

You must be logged in to post a comment.

Welcome back to smallcase blog

New here? Create an account

Forget password
or sign in with

Sign in with Google

Register for this site!

Sign up now for the good stuff.

Lose something?

Enter your username or email to reset your password.

or sign in with

Sign in with Google

Your subscriptions

Weekly wrapup of all investment news and alerts from the markets

Lost your password?
  • smallcase – Invest / SIP in stock portfolios
  • About
  • Disclaimer
  • Twitter