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Indian market lazy portfolio - continued

My FatFIRE

TLDR: Back testing the lazy portfolio equity portion from the previous post

In my previous post, I proposed a Lazy portfolio for the Indian market. But I did not back test it to see how it would perform over the long term. The following are the ETFs and Funds that I proposed.

  1. UTI Nifty 50 index fund - 20%

  2. UTI Nifty next 50 index fund - 20%

  3. ICICI Prudential mid cap select index - 10%

  4. Motilal Oswal NASDAQ 100 ETF - 10%

  5. Reliance ETF Hang Seng BeES - 10%

Given that most index funds are relatively new, I am going to use an equivalent ETF for comparison for longer term return calculation. (Also helps me re-use the material I had prepared for the fund reviews as well)

UTI Nifty 50 - Replaced with Reliance NIFTY ETF

UTI Nifty 50 - replaced with Reliance NIFTY Jr ETF

1) Reliance NIFTY ETF - SIP returns

So what would be the return of 10,000 rupees invested in this fund every month yield if invested for the last few years.

  1. 10 Years - 1-Jan-2009 to 31-Dec-2018 - CAGR - 11.12%

    • Amount invested - 1,200,000.00

    • Value - 2,119,888.40

  2. 7 years - 1-Jan-2012 to 31-Dec-2018 - CAGR - 11.72%

    • Amount invested - 840,000.00

    • Value - 1,263,849.58

  3. 5 years - 1-Jan-2014 to 31-Dec-2018 - CAGR - 10.71%

    • Amount invested - 600,000.00

    • Value - 779,039.63

Data from moneycontrol.com

2) Reliance NIFTY Jr ETF - SIP returns

So what would be the return of 10,000 rupees invested in this fund every month yield if invested for the last few years.

  1. 10 Years - 1-Jan-2009 to 31-Dec-2018 - CAGR - 14.94%

    • Amount invested - 1,200,000.00

    • Value - 2,593,135.85

  2. 7 years - 1-Jan-2012 to 31-Dec-2018 - CAGR - 15.23 %

    • Amount invested - 840,000.00

    • Value - 1,428,836.31

  3. 5 years - 1-Jan-2014 to 31-Dec-2018 - CAGR - 12.2%

    • Amount invested - 600,000.00

    • Value - 807,421.68

Data from moneycontrol.com

3) ICICI mid cap select index ETF - SIP returns

Since this ETF has been around for the last 3 years only, we cannot quite get the comparison one to one.

4) Motilal Oswal Nasdaq 100 - SIP returns

So what would be the return of 10,000 rupees invested in this fund every month yield if invested for the last few years. Since the ETF was launched in 2011, we do not have 10 year history.

  1. 7 years - 1-Jan-2012 to 31-Dec-2018 - CAGR - 19.27 %

    • Amount invested - 840,000.00

    • Value - 1,645,612.27

  2. 5 years - 1-Jan-2014 to 31-Dec-2018 - CAGR - 17.11%

    • Amount invested - 600,000.00

    • Value - 908,068.50

Data from moneycontrol.com

5) Reliance Hang Seng index ETF - SIP returns

So what would be the return of 10,000 rupees invested in this fund every month yield if invested for the last few years. Since the ETF was launched in 2010, we do not have 10 year history.

  1. 7 years - 1-Jan-2012 to 31-Dec-2018 - CAGR - 10.53 %

    • Amount invested - 840,000.00

    • Value - 1,212,225.06

  2. 5 years - 1-Jan-2014 to 31-Dec-2018 - CAGR - 10.06%

    • Amount invested - 600,000.00

    • Value - 766,792.89

Data from moneycontrol.com

Word of caution

  • ICICI mid cap select index ETF has a average daily volume of 20K, Hang seng ETF is 1K. Liquidity is a concern for those investing in these two ETFs. So do not consider Hang Seng ETF until the volumes improve.

Conclusion

Based on the performance of these indices, clearly the lowest return for a period of 5 years via SIP is 10% and the highest 19% for 7 years, I would be happy with these returns. For anyone who wants to automate their investments and put them on auto pilot, I would recommend going the index fund / ETF route with a caveat around the liquidity concerns especially around Hang Seng ETF which should be avoided for now until the volumes improve.

What are your thoughts on the return or these indexes for a lazy equity portfolio. Leave your comments below.