When basket of securities is put together by an investor

Is this route worth exploring for small investors? The returns are certainly quite attractive. The best performing small-case portfolio Value & Momentum run by Windmill Capital has risen 155% in the past three years (see graphic). This is much ahead of the 50.2% rise in the BSE 500 but comparable to the 158% growth registered by Quant Small Cap Fund, the best performing mutual fund during the same period. Can these curated baskets of well-chosen Curated portfolios are typically a research-driven basket of stocks or ETFs reflecting a particular idea, theme, goal, investing style or strategy. These are created and managed by investment professionals registered with SEBI. To invest in curated portfolios, you may go via any of the brokers that have a tie up with either Smallcase or WealthDesk. Both platforms are directly integrated with top stockbrokers, including Zerodha, Upstox, Angel One, The platforms briefly outline the investment rationale for every idea or theme as also the methodology behind the portfolio construction. Investors can see its performance record relative to a benchmark index. But details about the portfolio holdings is made available only after you subscribe. Once you sign up, you can purchase the entire basket of stocks with a single click. The platform will place buy orders for all securities in the basket via the broker, which will get executed immediately depending on the prevailing “The tech behind the platform and direct integration with brokers fac...

Diversification is one of the most fundamental yet misunderstood concepts in investment management. I will begin with a basic and hopefully intuitive discussion of the principles of diversification and the mechanics by which it works. Then, I will provide a more technical presentation for those interested. Throughout, I will use numeric examples to illustrate the principles involved. Finally, I will examine some typical historical data regarding diversification across asset classes (e.g., stocks, bonds, and cash). There is a time-tested investment analogy: Don’t put all your eggs in one basket. In this analogy, the eggs are individual investments and the basket is your overall investment portfolio. The simple logic is that if you drop the basket, your investment portfolio will be wiped out. Spreading your “eggs” around minimizes the possibility that bad luck for a single investment will adversely affect your overall portfolio. Risk-averse investors clearly benefit from diversification (and sleep better at night). However, some investors seem to defy this logic. Most of us have heard investors bragging about the huge gains they have achieved by placing a large bet on a single stock or other investment. The reality is that we never hear those same investors speak as loudly when their performance is not so stellar. Another analogy applies here: In baseball, swinging for a “home run” often leads to a “strikeout.” For the rest of this note, let’s assume that we agree that diver...

Securitization is a means of turning assets into tradable investments by pooling them together. Issuers repackage these assets and sell them as interest-bearing securities . Buying these securities allows investors to diversify their portfolios compared to investing directly in one of those underlying assets, and may give them access to assets they otherwise could not invest in. Securitization dates back to the 1970s, when US government-backed agencies began to pool mortgage loans and sell them as mortgage-backed securities. Securitization today still often occurs with mortgage loans and other debt, but any financial assets can theoretically be securitized. Institutions often use securitization as a way of transferring their default risk to other entities and investors or to raise cash. Suppose that the fictional financial institution World Wide Bank issues mortgages and other types of loans . The bank wants to continue to originate loans, but fears that it’s taking on too much risk. Instead of no longer offering new mortgages, World Wide Bank decides to sell off some of the mortgages it already has. Rather than selling each loan individually, the bank securitizes the mortgages into a single mortgage-backed security and offers that to investors. The investors get the perk of the income from the mortgages, while World Wide Bank gets the benefit of reducing some of its risk. Securitization is like an appetizer combo at a restaurant… Instead of selling individual appetizers, ...

• An index measures the price performance of a basket of securities using a standardized metric and methodology. • Indexes in financial markets are often used as benchmarks to evaluate an investment's performance against. • Some of the most important indexes in the U.S. markets are the S&P 500 and the Dow Jones Industrial Average. • Passive index investing has become a popular low-cost way to replicate the returns of popular indices such as the S&P 500 Index or Dow Jones Industrial Average. • Benchmarking your investment strategy against the appropriate index is key to understanding a portfolio's performance. Each index related to the stock and bond markets has its own calculation methodology. In most cases, the relative change of an index is more important than the actual numeric value representing the index. For example, if the However, to assess how the index has changed from the previous day, investors must look at the amount the index has fallen, often expressed as a percentage. Index Examples The S&P 500 Index is one of the world's best-known indexes and one of the most commonly used benchmarks for the Conversely, the Dow Jones Industrial Average is also well known, but represents stock values from just 30 of the nation's publicly traded companies. Other prominent indexes include the MSCI and the Bloomberg US Aggregate Bond Index. Indexes are useful for providing valid benchmarks against which to measure investment performance for a given strategy or portfolio. By un...

When you began your investing journey, you might have come across something known as a UIT, or Unit Investment Trust. This overview will walk you through some of the basics, so you have a good working knowledge of what UITs are, how they are put together, and why they were such a mainstay of investor portfolios for so many generations. What Is a Unit Investment Trust? Like a mutual fund, a unit investment trust is registered with the United States Securities and Exchange Commission under the Investment Company Act of 1940. AUIT differs from a mutual fund in that it consistsof a basket of passively held stocks, bonds, mortgages,REITs, MLPs,preferred stocks, or other securities put together by an • Take delivery of the underlying assets (known as an "in-kind" delivery).That is, you get your share of all of the stocks, bonds, REITs, or other holdings in the trusttransferred to your name.For most people, this would mean depositing them in a brokerage account or having them directly registered to take advantage of the • Rollover the trust into a new similar, identical, or different unit investment trust offered by the sponsor.Many times, sponsors will offer incentives to do so, frequently in the form of a lower sales charge or another fee arrangement. • Take cash liquidation value at the termination of the trust when the underlying holdings are sold or, in the case of bonds, matured. From a practical standpoint, there isn't much difference to the investor, but it's important to...