iTrend is a DIY “Do It Yourself” consulting service with a focus on minimal intervention. The idea is to enable you to execute and maintain the portfolio in your own trading account on the basis of our advisory. We run a strategy with the objective to identify the top ranked stocks from a chosen stock universe (BSE Index). The product is a proprietary Momentum based strategy, all transactions as part of this strategy are delivery based, that makes iTrend a long only strategy. The Portfolio is rebalanced every Friday or Quarterly (according to the product) for any changes based on latest data and emailed to clients for their action with just 1 minute of effort per week.
This logical and evidence based investing is designed to be easy to implement even if you have no market experience. iTrend eliminates human bias, the trades are not based on market panic or euphoria. The main aim of the strategy is gradual wealth generation by selectively following winning stocks. The historical performance of this portfolio has beaten the benchmarks.
Discretionary investing is a non-systematic way of investing where there are no set rules and the decisions of asset allocation, asset choice, period of holding, risk taken are a function of the investor’s discretion. A nondiscretionary system is on the other hand a mechanical system where defined rules are used to construct the portfolio as per the decided & tested methodology, position sizing, entry and exit strategies etc. There is no discretion in the hands of the investor nor does emotions or behaviour play any role. Momentum Investing is done as a non-discretionary system and purely based on price action. The key feature of the product is the convenience and minimal time required for execution.
Momentum is simply a high probability phenomenon that an asset continues its past performance. A rising stock tends to keep rising and a falling stock will tend to keep falling. The persistence in performance is what is known as momentum. Momentum Investing is simply a way of allocating the portfolio across a diversified number of stocks (or asset classes) which satisfy the criterion of positive momentum.
BSELM250 is the flagship product of V Vision Alpha. The product is focused on S&P BSE ALLCap Index which comprises of Top Large, Mid and Small cap stocks listed on the Bombay Stock Exchange. This is a High Risk High Return product with a higher volatility relative to LTALPHA. Clients with “Assertive” risk profile can allocate upto 50% and ones with “Balanced” or “Conservative” risk profile can allocate upto 25% of their portfolio in this product. Clients should ideally be invested for a period of 6 to 8 months before reviewing the performance
LTALPHA is a popular strategy that ensures your investments do well in good as well as bad times. This is a long-term investment strategy that you can use to build wealth over the years to come. This is a Low Risk Low Return product and invests in three Asset Classes – Equity, Debt and Gold. Based on the market cycle at play the allocation into each of the above asset class is adjusted dynamically.Clients with “Balanced” and “Conservative” risk Profile can allocate upto 50% of their Capital allocation. Clients should ideally be invested for a period of 12 to 15 months before reviewing the performance.
Momentum is a rule-based investing system that buys and sells based upon past returns. Momentum investors buy outperforming securities and avoid underperforming ones.
The iTrend BSELM250 Portfolio holds up to 20 stocks and LTALPHA holds upto 7 instruments, selected on the basis of quantitative criteria, primarily price momentum, and reviews them weekly and quarterly respectively.
BSE ALLCAP Index listed stocks for BSELM250 and various ETFs for LTALPHA, meeting minimum criteria of company market capitalization. This translates to nearly 90% of the total market cap trading in India.
Our Quantitative model scores stocks based on a set of price and price related parameters. Stocks in the Top 20 are candidates for inclusion in the portfolio. Stocks exit the portfolio in two scenarios; other stronger stocks emerge, or if existing stocks fail one or more criteria for retention in the portfolio. In case of LTALPHA, the portfolio consists of all 3 asset class viz Equities, Gold, Bonds and US Equities
Stocks are weighted according to their rank (based on price) and volatility compared to other candidates
The portfolio is reviewed weekly and changes, if any, is communicated at 1.35pm IST every Friday. Our estimate in the past two years is approximately 20% of the portfolio changes each month (this can and does change depending on prevailing market volatility). LTALPHA is rebalanced once in a quarter.
No. The momentum portfolio is meant to be bought as a portfolio and not as individual stocks. Stocks are retained in the portfolio until they lose momentum. If a stock that is up 100%+ and still continues to be in the portfolio continues to show momentum and so should be bought in the target weight along with the other stocks in the portfolio.
Most of the transactions will result in short term holding period (less than 12 month) and hence will be
Subject to 15% Short-term capital gains tax or as applicable to the client. We believe the advantages / Returns from the product far exceed the additional tax hit Vs LTCG
Hypothetical Taxation illustration: If the portfolio returns 25% in a financial year, the tax impact = 15% X 25% = 3.75% i.e. your after-tax return comes to 25% – 3.75% = 21.25%
Other costs to consider: Brokerage costs*, STT (Securities Transaction Tax) levied on every buy and sell, and DP charges. Assume another 2% of gains to be applicable for these costs.
* Brokerage costs vary depending on your broker.
This is impossible to predict. Our strategy does well in general market up-trends or when some components of the market show strong positive movement. However, it also underperforms at times with respect to the NIFTY. This underperformance at times can last for 6 to 12 months. Over longer holding periods, we do believe it beats the market.
Please refer to this link for the latest performance – https://vvisionalpha.com/performance/
Please refer to this YouTube link on how to execute the iTrend trades every Friday via the https://vvisionalpha.com website in your Zerodha trading account.
https://www.youtube.com/watch?v=sjNiJ9OSCT0&t=3s&ab_channel=VVisionAlpha
The possibility of any stock part of the iTrend portfolio crashing exists; however, in the iTrend portfolio the allocation is spread across 15 plus stocks, this way Risk is mitigated to a good extent.
Consider this e.g. – On a 1 lakh portfolio, 20% is allocated into one stock (Rs 20,000) and if this stock falls 20% (before iTrend exits) the total loss would be 4,000 and that would be just 4% of your overall portfolio.
My standard reply has always been – it doesn’t matter when you invest, the first year of investment is when the risk is at the highest. Markets since 1986 (when the Sensex started) have closed in positive one year ahead 70% of the time. This is the drift that has meant that a long term investor has a very low chance of losing. Timing the market is a futile exercise; it is not possible to Buy at the lows and Sell at the tops as these markers are realized only in hindsight. One could start off with 30% of the target allocation and increase it periodically when the market corrects.
By design iTrend exits stocks and moves into Cash when there is a trend reversal in the market, subsequently re-deploys the Cash when the market becomes conducive for re-investing.
Stocks exit the portfolio in two scenarios; other stronger stocks emerge, or if there is negative / loss of momentum in the current stocks. Below picture is a better representation of this point
Market could get into a downtrend and remain that way for a few months which could lead to negative results in ones portfolio, however, since inception iTrend has outperformed the benchmark 70% of the time, if you ignore the short-term fluctuations in the market overall iTrend has managed to outperform the benchmark most of the time. You must be willing to remain invested and follow the process with discipline throughout these periods to come out of the drawdowns, recover your investment and then make a decent return on your corpus over a longer time frame of 2-3 years
No, investing in any Equity product including iTrend is always subject to market risks. One should invest only after having understood the general risk associated with the Market.
No, there is a reasonable probability of any of the trades going wrong. However, iTrend works on the principle of “Cut your losses short and let your winners run” with this the overall performance tends to be good.
For further details please contact [email protected]