It’s been 3 years since the launch of Gulaq portfolios. We found a pro tip to discover Gulaq portfolios on smallcase with ease. Simply sort smallcases on 3-year returns 😊 and see it yourself. Gulaq is our first retail investing brand at Estee. We are eternally grateful for the love and trust investors have shown in Gulaq portfolios.
We are delighted about our 3 years performance, but what makes us feel proud is the performance in last 1.5 years. Markets are almost flat since they peaked in October 2021, whereas Gulaq Gear 6 has given a whopping 43% returns since then.
We have received queries from investors about how to evaluate Gulaq Gear 6 performance. We have a simple answer apart from returns produced. Investors should look at the skill of an active investor. Well, how to measure it?
The skill of an active investor lies in the ability to beat benchmark’s returns. We have analyzed what is the probability of Gulaq Gear 6 beating benchmark over 3-months and 12-month rolling period.
Probability of Gulaq beating benchmark in 3-month duration = 72%. In the following graph, positive Alpha means extra returns produced compared to Benchmark. Negative alpha means underperformance.
Can you guess the probability of Gulaq beating the benchmark in 1 yr duration? It is 99.4%. There were 508 instances of 1-year rolling period returns. Out of them, only 3 times Gulaq failed to beat benchmark by a whisker. Considering only a minute proportion beats benchmark over long-term, the ability to beat benchmark consistently is massive. We are glad that we did this analysis!
We strongly recommend staying invested for at least a year before judging a smallcase performance. In case the historical data is available, you can do this analysis before investing in that smallcase. Buying or exiting a smallcase on shorter term returns is not recommended. This applies not just for Gulaq portfolios, but every smallcase listed.
Let’s have a look at the sector allocation in Gulaq Gear 6 portfolio:
|Sector||Index weight – June||Gulaq Gear 6 weights – May||Gulaq Gear 6 weights – June|
We are most bullish on IT sector, shifted from materials last month. However, we are still bullish on materials. We have increased our allocation in IT from 20% to 38%.
Financials continue to be underrepresented with close to 0% weightage in our portfolio. In Materials, though we are still overweight, the weight has been reduced from 39% to 21.5%.
In recent months, smallcaps had golden run while largecaps have given decent returns. Our algorithms picked these clues from market. Over the last 3 months, the allocation to large cap has reduced from 49% to 18% and allocation to smallcap has increased from 18% to 47%.
The allocation to the factors remains the same from last month to this month. However, we have multiple sub-factors under each factor. For example, there are about 6 ways we measure momentum and each month we might pick a different version of momentum based on what is more likely to work in the current market regime.