Thread by @Gautam__Baid

1/ Ahead of Stellar Wealth Smallcase going LIVE next week on December 6th, I am pleased to share the preview of our products through which we will be investing in Value+Growth opportunities & Megatrends and aim to create long term wealth for investors in the Indian stock market.

2/ Smallcase is a managed portfolio concept. A 100% digital product. Investors get to subscribe to model portfolios curated by SEBI registered professionals and entities. Refer to this link for more details - investorq.com/question/why-t…

3/ Some useful videos:

Who are smallcase managers:

What are smallcase subscriptions:

How to subscribe:

How to invest in your smallcase:

How to rebalance:

4/ Smallcase lets you subscribe to portfolios like Stellar Wealth's “FlexiCap” and “Megatrends”.

5/ FlexiCap and Megatrends are benchmark agnostic diversified portfolios of ~25-30 companies with no fixed market cap constraints. Listed stocks, Equity ETFs, and Liquid Fund ETFs (to serve as cash positions) will be the allowable constituents of these smallcase portfolios.

6/ FlexiCap Portfolio is a Value+Growth strategy which combines long-term compounders with shorter-term tactical bets like commodities, cyclicals, and special situations (demergers, merger arbitrage, promoter/management change).

7/ Megatrends Portfolio will focus on stocks within sectors which are in a long-term megatrend. They include CDMO/CRAMS, FinTech, Music Streaming, Ecommerce, Cloud Computing, Electric Vehicles, and Digital Transformation, among others.

8/ As regards the risk profile of our smallcase portfolios, we invest in low/no debt, growth companies. I believe this low-risk orientation will help protect and preserve a lot of wealth for our clients.

9/ It should also be noted that our FlexiCap Portfolio is expected to outperform Megatrends Portfolio in bull markets (because FlexiCap will include cyclicals, & even commodity stocks at times), and our Megatrends Portfolio is expected to outperform Flexicap during bear markets.

10/ That’s why it is best to subscribe to both our smallcase portfolios as a holistic long-term solution for your wealth creation journey.

11/ We will be having a yearly plan for the “FlexiCap Portfolio” and the “Megatrends Portfolio” in smallcase. We will not be offering shorter duration plans.

12/ The annual pricing details are as given below:
• FlexiCap Portfolio: INR15,000 + INR2,700 (GST) = Total Rs 17,700
• Megatrends Portfolio: INR12,000 + INR2,160 (GST) = Total Rs 14,160

13/ For both the FlexiCap and Megatrends Portfolio, the minimum initial investment amount required to subscribe is ~Rs 200,000 (this figure represents the minimum amount you will require to buy the group of stocks in our model portfolio in my recommended weightages)

14/ Subscribers should ideally begin with a minimum investment capital of Rs 5 lakhs for each portfolio in order for the annual fee to make economic sense.

15/ Alternatively, you can begin with the minimum investment amount required to subscribe & then increase your invested capital to Rs 5 lakhs over time by the end of year 1 through your savings. If you think that is not possible, then you should avoid investing in our smallcase.

16/ I want all my clients to get the best possible post-fees returns and I am not interested in engaging in the game of just focusing on increasing my subscriber base simply for boosting my revenue. A happy customer=long-term success for Stellar Wealth Partners.

17/ You can use your existing broker account for smallcase if it is one of the following names: 5paisa, Angel One, AxisDirect, Groww, HDFC Sec, Kotak Sec, Upstox, Zerodha, Edelweiss, IIFL Sec, Motial Oswal, Trustline, & Alice Blue.

Hopefully, ICICI Direct also gets added soon.

18/ All smallcase subscribers should strictly follow their initial model portfolio weights & the subsequent rebalancing instructions given to them. Else, the entire objective of a smallcase will be lost and subscribers won't obtain the long-term benefit of paying the annual fee.

19/ The option to set up SIP is available in smallcase for all users. Although it is optional, subscribers should always try to increase their SIP amount whenever their smallcase portfolio falls sharply (albeit temporarily) during bear markets & periodic sharp market corrections.

20/ The average holding period of our stocks will be context-dependent. If a portfolio holding is a commodity, cyclical, or special situation - it may be held for a shorter duration. Capex plays may be held for 2-3 years. Secular growth stocks will likely be held for many years.

21/ Our orientation will be to remain fully invested with long-term holding periods. We may park a portion of the portfolio in liquid bees occasionally, depending on valuations of individual portfolio holdings, available opportunities in the market, and the risk-return trade-off.

22/ As per SEBI rules, I am not allowed to give any CAGR return guidance to clients. Personally, I'll be very happy if our smallcase clients earn 20% post-fees CAGR over the next 25 years. At that rate, the initial invested capital would become almost 100x at the end of year 25.

23/ But you should note, that out of the 100x gains, almost 2/3rd of that come in the final five years. After 20 years, you would have ~38x. After 10 years, about ~6x. The power of compounding is heavily back-loaded and one needs patience to reap its big rewards.

24/ That’s why you should subscribe to Stellar Wealth Smallcase only if you have an investment horizon of at least 10 years or more, ideally 25 years. Else, I recommend you to avoid our smallcase.

25/ This initiative is a personal mission for me to build generational wealth for many families in India over the next few decades and for that I will always prioritize longevity of healthy returns over short-term/temporary high returns in a given year.

26/ Compounding at a decent rate of return over a long period of time is vastly superior to merely generating super high returns for a year or two. Investing success is challenging over a long time period. A bull market year fools many market participants into thinking otherwise.

27/ It takes a fairly short time to learn how to make money, but it takes a lifetime to learn how to not lose it. Long-term survival, endurance, and prudent risk-taking is the way to not just become rich, but to stay rich. This will be a key focus area at Stellar Wealth Partners.

28/ I am hopeful Stellar Wealth Smallcase will be noted for significant wealth creation of our clients over the next few decades. It is going to be a challenging and intense adventure, and I am ready for it.

29/ Dear friends, our long-term investing journey over the next few decades will not be smooth sailing as we will experience big bear markets & sharp corrections along the way, but through a combination of good stocks + patience + discipline, we will win!

30/ I will be launching a Telegram Channel soon. The website for Stellar Wealth Partners & the microsite for our smallcase subscriptions will go LIVE on December 6th morning.

I look forward to welcoming you to the Stellar Wealth Smallcase family. Let's build generational wealth!

31/ If you like the work I do, I will greatly appreciate it if you could retweet this thread. It will help increase awareness about my new initiative among investors in the Indian equity markets. Thank you for your support!