HDFC Sec Review of DIYSIP Picks of December 2015

We had issued a note on December 24, 2015 giving two lists of DIYSIP Picks – Better Known Stocks/Lesser known stocks.

We have run a query on the performance of these two lists of picks from December 2015 to May 2016 and checked their performance as on June 17, 2016. This was based on the assumption that on every 23rd of the month (starting Dec 23, 2015) a sum of Rs.1 lakh was put into a SIP in each stock. Further dividend received in the interim was also added to the value of the portfolio.

We find that:

Better Known Stocks: The SIP portfolio posted a positive annualized return of 31.7% compared to Nifty SIP annualized return of 13.8% The portfolio performance was positively impacted by Biocon, Tata Motors, L&T, Axis Bank ,EID Parry, JSW Steel & Coal India, while BHEL (poor Q4 results and visibility) and ONGC (the realisation on crude oil has been distinctly lower for the company in the last quarter).

Lesser Known stocks: The SIP portfolio posted a positive annualized return of 20.9% compared to Nifty SIP annualized return of 13.8%. The portfolio performance was positively impacted by Crompton Greaves, India Cement, First Source Solution, AIA Eng, MCX, Oberoi Realty, Selan Exploration and Reliance Infra, while Inox Wind (uncertainty following its Q4FY16 results), V Mart (poorer than expected Q4FY16 results), Jet Airways (aviation turbine fuel price recently hiked by a steep 9.2 per cent) and Gujarat Pipavav Port (poor port traffic following sluggish commodity prices) pulled down its performance.

The Better known stocks outperformed the lesser known stocks as institutional interest remained focused on largecaps and better known midcaps during this period.

To be effective, SIP needs to be sustained over a long time frame or at least an entire market cycle.

HDFC-Sec-DIYSIP-Report-June-2016