StockViz – Page 91 – Invest Without Emotions

Should You Buy What Mutual Funds Buy?

shyam November 1, 2015

No.

Mutual fund conviction buys

Every month, mutual funds disclose their portfolios and investors go to work on them to find investment ideas. But should they? Tracking their conviction buys – stocks that are new additions to their portfolios – tell a different story.

Median T+5, T+10 and T+20 returns were -0.13%, -0.93% and -1.3%

You were actually worse off following them if you were looking for a quick trade.

Does this mean fund managers miss the mark?

No. Their reason for buying a stock makes sense for the strategy and portfolio that they are running. Their time horizon extends beyond 20-days. Using their actions to guide your trading decisions is what misses the mark.

How is this data useful?

This is basically a negative result. The next time some fund manager is asked what he is buying on TV or you come across a media item that lists the most bought stocks, curb your instinct to go out and buy them.

If you really like what a fund manager is doing with his portfolio, it is cheaper to buy his fund rather than trying to do it yourself.

Categories Investing Insight, Your Money Tags mutual funds

Mutual Fund Exposure of Stocks

shyam October 31, 2015

Know thy enemy

Mutual fund asset managers face a lot of ‘career risk’ if they make an unpopular bet and are proven wrong. They end up following the herd in selling on the face of bad news so it pays to keep an eye on the how much exposure funds have to a specific stock. If no mutual fund owns it then you could make a “deep value” case for an undiscovered gem. If a lot of funds own it, then it is probably a momentum play.

However, be vary of outsourcing your investment decisions. For instance, Canara Robeco Emerging Equities’ exposure to DCB Bank stood at 1.86% as per September’s portfolio disclosure – it was a new addition. The stock is down ~40% since it announced an ambitious expansion plan in October.

Fund Exposure on StockViz

The ‘Analysis’ section on the equity page gives a 6-month ownership history of a specific stock. For example, this is how it looks for DCB Bank:

Play around and let us know if you have any suggestions!

Categories Investing Insight, Your Money Tags mutual funds

Monthly Recap: Transportation Cloud

shyam October 31, 2015November 1, 2015

Equities

Major
DAX(DEU)	+12.32%
CAC(FRA)	+9.93%
UKX(GBR)	+4.94%
NKY(JPN)	+9.75%
SPX(USA)	+8.96%

MINTs
JCI(IDN)	+5.48%
INMEX(MEX)	+4.50%
NGSEINDX(NGA)	-6.49%
XU030(TUR)	+7.65%

BRICS
IBOV(BRA)	+2.42%
SHCOMP(CHN)	+10.80%
NIFTY(IND)	+1.47%
INDEXCF(RUS)	+4.17%
TOP40(ZAF)	+7.66%

Commodities

Energy
Brent Crude Oil	+2.00%
Ethanol	+4.69%
Heating Oil	-0.26%
Natural Gas	-9.11%
RBOB Gasoline	-2.26%
WTI Crude Oil	+2.59%

Metals
Copper	-1.28%
Gold 100oz	+2.37%
Palladium	+3.80%
Platinum	+8.28%
Silver 5000oz	+6.16%

Currencies

USDEUR:+1.53% USDJPY:+0.58%

MINTs
USDIDR(IDN)	-6.61%
USDMXN(MEX)	-2.46%
USDNGN(NGA)	-0.11%
USDTRY(TUR)	-3.67%

BRICS
USDBRL(BRA)	-3.49%
USDCNY(CHN)	-0.61%
USDINR(IND)	-0.50%
USDRUB(RUS)	-2.34%
USDZAR(ZAF)	-0.31%

Agricultural
Cocoa	+2.56%
Coffee (Robusta)	+2.48%
Lean Hogs	-19.47%
Lumber	+11.43%
Orange Juice	+27.57%
Cotton	+5.45%
Feeder Cattle	+7.28%
Soybeans	-1.12%
Wheat	+1.90%
White Sugar	+6.16%
Cattle	+11.69%
Corn	-1.74%
Sugar #11	+18.90%
Coffee (Arabica)	-0.45%
Soybean Meal	-1.52%

Credit Indices

Index	Change
Markit CDX EM	+2.60%
Markit CDX NA HY	+0.76%
Markit CDX NA IG	-11.30%
Markit iTraxx Asia ex-Japan IG	-16.79%
Markit iTraxx Australia	-11.81%
Markit iTraxx Europe	-14.41%
Markit iTraxx Europe Crossover	-100.43%
Markit iTraxx Japan	-9.37%
Markit iTraxx SovX Western Europe	-4.17%
Markit LCDX (Loan CDS)	+0.00%
Markit MCDX (Municipal CDS)	-2.55%

Diwali Muhurat trading session is on Wednesday, November 11, 2015 between 17:45 and 18:45. Happy Diwali!

International ETFs (USD)

Nifty Heatmap

Index Returns

For a deeper dive into indices, check out our weekly Index Update.

Market Cap Decile Performance

Decile	Mkt. Cap.	Adv/Decl
1	+12.12%	74/57
2	+14.05%	88/42
3	+11.56%	89/41
4	+12.47%	89/41
5	+10.04%	85/45
6	+8.32%	80/50
7	+8.73%	76/54
8	+7.37%	75/55
9	+3.61%	67/63
10	+3.08%	68/63

A solid rally across the board…

Top Winners and Losers

VEDL	+18.00%
HINDALCO	+18.71%
TATAMOTORS	+28.92%
FEDERALBNK	-15.17%
BANKBARODA	-12.55%
HCLTECH	-11.25%

Beaten down sectors saw a smart bounce back. And Tata Motors – take a bow!

ETF Performance

INFRABEES	+2.65%
GOLDBEES	+2.25%
NIFTYBEES	+2.07%
CPSEETF	+1.01%
JUNIORBEES	+0.70%
BANKBEES	+0.54%
PSUBNKBEES	-0.90%

Banks seem to have hit a plateau. Have been range bound for almost a year…

Yield Curve

Bond Indices

Sub Index	Change in YTM	Total Return(%)
0 5	+0.00	+0.60%
5 10	+0.02	+0.55%
10 15	+0.02	+0.39%
15 20	+0.00	+0.56%
20 30	+0.03	+0.35%

Yields drifted up a tad…

Investment Theme Performance

ADAG stocks	+13.52%
Velocity	+9.20%
Quality to Price	+5.08%
Momentum	+5.02%
PPFAS Long Term Value	+3.37%
ASK Life	+1.59%
Next Trillion	+1.43%
Magic Formula	+0.83%
Enterprise Yield	+0.41%
Balance Sheet Strength	+0.22%
Low Volatility	-0.09%
Financial Strength Value	-0.87%
Tactical CNX 100	-1.55%
High Beta	-3.35%
The RBI Restricted List	-6.03%

Velocity – our absolute momentum theme – overtook our thoroughbred relative momentum theme this month.

Equity Mutual Funds

Best
Mirae Asset China Advantage Fund – Regular Plan Growth Option	+12.49%
DSP BlackRock World Energy Fund – Regular Plan – Growth	+9.85%
DSP BlackRock World Mining Fund – Regular Plan – Growth	+8.88%
Mirae Asset Global Commodity Stocks – Growth Option	+8.32%
Reliance Japan Equity Fund- Growth Plan- Growth Option	+8.28%
DSP BlackRock World Gold Fund – Regular Plan – Growth	+8.14%
Franklin Asian Equity Fund – Growth Plan	+8.13%

Worst
MOSt Focused Midcap 30-Regular Plan-Growth Option	-1.19%
Religare Invesco Dynamic Equity Fund – Growth	-1.19%
L&T India Special Situations Fund-Growth Option	-1.22%
Indiabulls Value Discovery Fund – Regular Plan – Growth Option	-1.43%
Axis Midcap Fund – Growth	-1.67%
Union KBC Tax Saver Scheme – Growth Option	-1.95%
HSBC Progressive Themes Fund – Growth	-2.79%

Bond Mutual Funds

Best
Baroda Pioneer Credit Opportunities Fund -Plan B-Growth Option	+1.07%
L&T Resurgent India Corporate Bond Fund – Growth Option	+0.99%
Baroda Pioneer Credit Opportunities Fund -Plan A -Growth Option	+0.97%
Escorts Income Plan-Growth	+0.96%
Birla Sun Life Corporate Bond Fund – Regular Plan – Growth	+0.93%
Franklin India Dynamic Accrual Fund-Growth	+0.88%
Sundaram Flexible Fund -Flexible Income Plan Regular – Growth	+0.86%

Worst
SUNDARAM GILT FUND (Growth. OPTION)	-0.11%
IDFC – SSIF – Investment Plan -Regular Plan- Growth Option	-0.11%
SBI Dynamic Bond Fund – REGULAR PLAN – Growth (Previously Magnum NRI – LTP Upto 22/11/09)	-0.11%
IDFC Dynamic Bond Fund – Growth	-0.13%
JM G-Sec Fund – Growth Option	-0.14%
IIFL Dynamic Bond Fund – Regular Plan – Growth Option	-0.20%
JM Income Fund – Growth Option	-0.31%

Institutional Investment Trends

Thought to sum up the month

Autonomous cars will be commonplace by 2025 and have a near monopoly by 2030, and the sweeping change they bring will eclipse every other innovation our society has experienced. They will cause unprecedented job loss and a fundamental restructuring of our economy, solve large portions of our environmental problems, prevent tens of thousands of deaths per year, save millions of hours with increased productivity, and create entire new industries that we cannot even imagine from our current vantage point.

Source: Zack Kanter

Categories Your Money Tags monthly

Index Update 31.10.2015

stockviz October 31, 2015October 31, 2015

MOMENTUM

We run our proprietary momentum scoring algorithm on indices just like we do on stocks. You can use the momentum scores of sub-indices to get a sense for which sectors have the wind on their backs and those that are facing headwinds.

Traders can pick their longs in sectors with high short-term momentum and their shorts in sectors with low momentum. Investors can use the longer lookback scores to position themselves using our re-factored index Themes.

You can see how the momentum algorithm has performed on individual stocks here.

Here are the best and the worst sub-indices:

Relative Strength Spread

Refactored Index Performance

50-day performance, from August 18, 2015 through October 30, 2015:

Equally Weighted		Market Cap. Weighted
CNX REALTY (EQUAL)	+1.01%	CNX PHARMA (CAP)	+1.45%
CNX ENERGY (EQUAL)	+0.66%	CNX FMCG (CAP)	-0.74%
CNX PHARMA (EQUAL)	-0.32%	CNX ENERGY (CAP)	-1.02%
CNX INFRA (EQUAL)	-1.10%	CNX REALTY (CAP)	-1.82%
CNX COMMODITIES (EQUAL)	-2.12%	NSE QUALITY 30 (CAP)	-2.22%
CNX CONSUMPTION (EQUAL)	-2.82%	CNX MEDIA (CAP)	-2.31%
NI15 (EQUAL)	-3.17%	NI15 (CAP)	-2.35%
CNX FINANCE (EQUAL)	-4.18%	CNX CONSUMPTION (CAP)	-2.57%
NSE QUALITY 30 (EQUAL)	-4.20%	CNX COMMODITIES (CAP)	-3.04%
CNX PSE (EQUAL)	-4.60%	CNX IT (CAP)	-5.04%
CNX FMCG (EQUAL)	-5.64%	CNX FINANCE (CAP)	-5.11%
CNX IT (EQUAL)	-5.85%	CNX SERVICE (CAP)	-5.54%
CPSE INDEX (EQUAL)	-6.42%	CNX AUTO (CAP)	-6.50%
CNX SERVICE (EQUAL)	-6.45%	CNX METAL (CAP)	-6.52%
CNX MNC (EQUAL)	-7.44%	CNX PSE (CAP)	-7.06%
CNX METAL (EQUAL)	-7.68%	NV20 (CAP)	-7.19%
LIX 15 (EQUAL)	-7.99%	CNX MNC (CAP)	-7.43%
LIX15 Midcap (EQUAL)	-8.32%	CNX BANK (CAP)	-7.68%
NV20 (EQUAL)	-8.44%	CPSE INDEX (CAP)	-7.70%
CNX MEDIA (EQUAL)	-9.15%	LIX15 Midcap (CAP)	-8.33%
CNX AUTO (EQUAL)	-9.60%	LIX 15 (CAP)	-8.91%
CNX BANK (EQUAL)	-14.15%	CNX INFRA (CAP)	-11.84%
CNX PSU BANK (EQUAL)	-17.51%	CNX PSU BANK (CAP)	-18.66%

Trend Model Summary

Index	Signal	% From Peak	Day of Peak
CNX AUTO	SHORT	11.07	2015-Jan-27
CNX BANK	LONG	15.57	2015-Jan-27
CNX COMMODITIES	SHORT	35.27	2008-Jan-04
CNX CONSUMPTION	SHORT	6.47	2015-Aug-05
CNX ENERGY	SHORT	32.57	2008-Jan-14
CNX FMCG	LONG	9.76	2015-Feb-25
CNX INFRA	LONG	54.74	2008-Jan-09
CNX IT	LONG	87.97	2000-Feb-21
CNX MEDIA	LONG	18.27	2008-Jan-04
CNX METAL	SHORT	67.13	2008-Jan-04
CNX MNC	SHORT	9.13	2015-Aug-10
CNX NIFTY	LONG	10.34	2015-Mar-03
CNX PHARMA	SHORT	4.78	2015-Apr-08
CNX PSE	LONG	34.72	2008-Jan-04
CNX PSU BANK	LONG	43.64	2010-Nov-05
CNX REALTY	LONG	90.63	2008-Jan-14
CNX SERVICE	LONG	10.93	2015-Mar-03

Relative Strength Spread widened out – a good sign for momentum strategies. Metals, infra and energy indices continued to troll the depths. Pharma was the strongest.

Categories Your Money Tags index, momentum, weekly

Broadcast Dates on NSE

shyam October 29, 2015

This is more of a “note to self” post. I was trying to do some earnings event analysis and got tripped by this. If you look at NSE’s quarterly earnings broadcast, the ‘broadcast date/time’ they provide lags the time at which earnings are actually announced.

If you take a look at DCBBANK, for example, this is what NSE says:

dcb broadcast

However, results were announced the previous day, during market hours:

dcb announce

So if you are looking to match up market action with announcements, then NSE’s broadcast time-stamp is no good.

Categories Your Money Tags quant