Smallcase investing

Today let’s discuss one of the most consistent smallcase investing portfolios out there. These portfolios are designed by Gulaq, a retail advisory arm of Estee Advisors.

Let’s look at the returns first.

As you can see from the chart above, for all 3 years that this portfolio is live, it has given very healthy returns. Gulaq Gear 6 outperformed Nifty by huge margin every single year, and even consistently almost every month. There are 100s smallcases listed on Smallcase platform, but only a handful have managed to pull off such feat. Let’s look at what is the secret sauce of Gulaq portfolios.

Secret Sauce

The secret sauce in Gulaq portfolios is its balanced approach. It considers all types of factors like fundamental, quantitative and macro-economic factors.

There are more than 100 factors on which they rank each stock and then decide whether a stock is to be included in the portfolio or not.

Comparison with other popular smallcase portfolios

In this section I will compare Gulaq Gear-6 performance with three of the most popular smallcase portfolios.

–          MI_ST_ATH by weekend investing

–          Wright Momentum by Wright Research

–          Capitalmind Momentum by Capitalmind

We will consider the performance of these portfolios in 2022 along with their fees and minimum investment amount.

As we can see Gulaq Gear-6 has beaten all the other portfolios by a very wide margin.

The reason is that this was not a year for momentum factor. And this is not the first time it has happened. Betting on momentum is like betting on a specific sector. Like there is a great variability in performance of sectors and there is a great variability in performance of factors. Hence betting on one factor becomes very risky.

For a stable portfolio, one must find portfolios which are more diversified. Gulaq Gear-6 is one such portfolio. It consists of many such factors like momentum, value, quality, size, low volatility etc.

Let’s also look at the costs/fees of each of these portfolios.

 Smallcase portfolioMinimum InvestmentFees 6 mnt2022 Returns
Wright Momentum7150020007.2
Capitalmind Momentum680006750-2.3
WeekendInvesting MI_ST_ATH3500075001.1
Gulaq Gear 624000187524.8

Gulaq website also has many useful tools like emergency fund tool which helps us to figure out the amount of funds one should have based on your personal situation. It also has a risk profiling questionnaire which helps us with determining the asset allocation we should have.

About Gulaq and Estee

Gulaq is the retail advisory arm of Estee Advisors. They are SEBI registered investment advisors.

Estee is quant and analytics driven firm that was started in 2008 when algorithmic trading was permitted by SEBI in India. It is a pioneer in building algorithmic investment products.

Mr. Sandeep Tyagi, the CEO of Estee Advisors, has 30+ years of experience in portfolio management, analytics, and consulting. He pursued B. Tech from IIT Delhi and an MBA from Columbia Business School.

Estee has been running a successful PMS for more than 12 years, and that I-Alpha fund has not had a single negative return month till date.

The main reason for this success is their strong focus on quant-driven systematic research. There is no manual intervention thereby removing any human biases.

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