A curated portfolio is a collection of stocks or ETFs that is managed by a professional and is designed to reflect a particular strategy, concept, or idea. In a sense, they are similar to ready-made portfolios that were put together by investment professionals.
In most cases, curated basket portfolios are made up of stocks or exchange traded funds that reflect a specific topic, aim, investment style, and/or approach. These are conceived of and overseen by investment professionals who are members of SEBI.
As a result, small case investments (Curated Portfolio Basket) do not have any hidden charges, and they end up being an Alternative that is substantially less expensive than mutual funds.
What Is The Procedure For Handling Curated Portfolio Such As Small Cases?
- Numerous Curated portfolios are available from fintech startups like smallcase and Wealthdesk, apart from these start-ups, investment gurus are also there to guide you.
- If you use their platform, you can immediately buy stock baskets from normal brokers like Zerodha, Upstox, ICICI Direct and HDFC Securities.
- Based on theme and color, your Demat account will automatically be credited with the stocks that were shortlisted.
- You will also receive a notification reminding you to rebalance your portfolio whenever the specialist makes the adjustment. It is up to you whether or not to rebalance your stock portfolio.
- When you choose a professionally curated portfolio, one of the benefits you receive is the opportunity to make direct investments in stocks and exchange-traded funds (ETFs) without having to devote the necessary amount of time or possess the necessary level of expertise to perform the necessary research.
- When compared to the returns from a mutual fund, an individual investor has a significantly larger number of portfolio options.
How does Smallcase function?
- Smallcases require a brokerage account. And for that reason only, Smallcase Technologies has formed strategic alliances with well-established brokerage companies like as Edelweiss, Zerodha, and HDFC Securities.
- The need for a trading account as well as a Demat account is necessitated by the fact that smallcase investing entails the ownership of stocks issued by a number of different corporations.
- As soon as the transaction is finalized, cash is removed from the investor’s trading account, and the investor’s Demat account is credited with the stocks that were purchased in exchange for the cash.
- These stocks are free to be held, traded, or sold according to the investor’s requirements because there is no predetermined lock-in period associated with them.
‘Curated Portfolio Basket’ V/S. ‘Mutual Fund’.
Price paid for investment:
It is common knowledge that investments in mutual funds can charge annual fees of up to 1.5–2 percent of the amount invested. This fee structure is known as the expense ratio. At the time that the transaction is being processed, Smallcases only charges a negligible amount, may be 0.2%. Consequently, there are no covert expenses associated with small-case investments, and they end up being a significantly more cost-effective choice than mutual funds.
Control and disclosure:
The stocks that make up a mutual fund’s portfolio are made public at scheduled times. The advantage of investing in a small amount is that you can immediately see and manage your money. Unlike mutual funds, they do not need to depend on a portfolio manager to make investments for them.
No commitment period (Lock – In):
Smallcases are exempt from the rule of lock-in periods. There is no time limit for investors to exit smallcases, unlike mutual funds, which may require investors to hold on for a set period of time. Investors have complete control over when and how they want to withdraw their money.
Shares vs. Units:
Investors are guaranteed ownership rights in the shares that make up their portfolio when they purchase a small case investment. Because they do not own any of the companies in the portfolio, investors who use mutual funds do not actually own any stock in the funds themselves.
- To the beginner investors, many companies in the curated stock portfolio market provide similar services. To attract more investors, for example, these products are being sold at a low price of Rs 1,000.
- When it comes to asset allocation, screening methods, rebalancing, and factsheets, however, curated stock portfolios keep some level of transparency intact. Investing in equities and ETFs through a CSP can be backed by research analysts and investment advisors.
- As a result of the pandemic, curated stock portfolios have gained popularity. Portfolio Management Services (PMS) increased the ticket size from Rs 25 Lakh to Rs 50 Lakh, which prompted a large number of DIY (Do it Yourself) investors to switch to curated stock portfolios.
Are curated portfolios capable of delivering higher returns than mutual funds?
- If a person is willing to take on more risk, they may want to concentrate on carefully selected stock portfolios. But new traders may prefer to stick with equity funds, which are less risky than curated stock portfolios.
- If you don’t know what you’re doing when it comes to stocks, you’re better off sticking with mutual funds.
- Curated Portfolios are not recommended for use by individuals who are new to the equity markets because they have a number of flaws. It’s possible that the approach used to calculate returns on curated stock portfolios won’t be disclosed.
- In addition, there are CSPs that will not disclose the dates on which they will be releasing their products.
- Investors who want to diversify their holdings and gain access to specialized knowledge should consider managed equity as an excellent option. In order to avoid investing in a product that is too risky for them, first-time investors should stick to equity funds.
- Market-savvy investors can achieve their financial goals by investing in curated stock portfolios that have been carefully selected. But new investors need to think before getting into this.
We may conclude from the foregoing discussion that new investors should always start with either expert assistance or less hazardous investing options. Alternatively, he or she may suffer undesirable repercussions. While it’s true (may be) that Curated Mutual Fund Portfolios have produced impressive results in the present, before making any investment-related decisions, investors should evaluate their own risk profile and financial goal. We hope you make invest with better research.