TLDR - Year end view of index portfolio

    I had debated this in my head on whether to share the raw financial data to the whole wide world or not. But given that this is a limited view of my portfolio, i don’t see any harm in coming out with the details. I hope to provide this view at the end of each quarter for all my index fund investments, possibly to other investments as well in the future.

Year in Summary

  The year started off with a bang with the markets reaching new highs in Jan and there was a general sense of euphoria in the market. But there was always the pullback in the horizon, which is what exactly happened.

A sharp pullback from there on till April after which there was a gradual rally back towards the Jan highs by August month end. This was followed by the serious correction that we have seen over the last 4 months all the way to the year-end.

Key index returns

How was the market return on key indexes Year-to-date in 2018 as of 26-Dec-18.

• Sensex = 5.26%

• Nifty = 2.46%

• Nifty next 50 = -10.08 %

• Nifty mid cap 100 = -16.45 %

• Nifty Small cap 100 = -30.19 %

Except for the bluest of blue chip companies (Sensex and NIFTY) all other indexes have seen a serious correction in 2018, falling between 10% for NIFTY next 50 to more than 30% in case of the NIFTY small cap 100.

My Index Investments

  If you have not read my blog post on how i purchase my funds - i recommend you do that.  My purchases follow the market direction. There will be a few months where there are a lot more cash outflow than in other months based on how the prices are triggered.

I have roughly invested 10 Lakhs (1 million) into ETFs and the results aren’t pretty. I am down at the end of the year by 67K or roughly 6.3%. Compared to NIFTY or Sensex this might be bad, but compared to broader market indexes, I think -6.3 % is not too bad.

I am not doing an SIP or SEP (Systematic Equity Plan) of the these indexes on a set amount or frequency; How does my purchase split look across the 12 months of 2018? This graph below shows the monthly purchase history of the indexes. I was a bit enamoured by the September crash and i got carried away which you can see by the spike in investments for that month. But for the most part my monthly purchases are close to my benchmark of 75K rupees a month.

Overlaps

As you can see from my portfolio there are certain items that are duplicates. I bought NIFTY index from two ETF providers - KOTAK and Reliance.

Similarly NSE Mid cap index from two ETF providers - ICICI and Motilal Oswal.

I have stopped purchasing one of these funds in both cases - No more Kotak NIFTY fund and No more Motilal Oswal Midcap 100. Going forward this duplication should get eliminated automatically.

2019 outlook

What does this all mean for 2019? There are many variables that can have an impact on 2019 outlook

• Global market corrections

• Assembly elections in India

• Crude oil price variations

• USD/INR price action impact

• Emerging market pullback by FII

Just to name a few. How does it impact my investment strategy? Actually it doesn’t. I am just going to continue these index purchases as planned into 2019 at a similar investment frequency and value, irrespective of whether we go into a recession next year or a bull market.

What is your take on these indexes? What are your favourites? What is your outlook for 2019 and are you planning a change in strategy for next year?

Leave your comments below.

Happy Investing - #MyFatFIRE