Comment on Introducing smallcase — Invest in ideas

27pin commented on 11 Sep 2016, 01:29 PM

Hi Smallcase and Zerodha, congratulations to you on launching this platform. What you have created here really looks impressive. I have two questions for you.

1.) When you create re-balance updates that result in dropping of stocks from a smallcase – do you try and minimize the capital gains taxation by realizing losses before completion of one year or realizing profits after one completion of one year ? This is something that one does not have to think for each stock when one invests in a Mutual Fund.

2.) I see you have provided two year returns for each smallcase. For example two year returns of “Growth at a Fair Price” shows 226.84 on an investment of Rs. 100 two years ago which translates to a 50% average return every year. There are some which even show 60%. This is almost 4 or 5 times the return of even the best mutual funds in India during the same period. Since Smallcase started only a few months back, can you please throw light on how you are calculating these returns for the past two years when these smallcases did not even exist. If we are just taking the current portfolio and looking at last two years growth isn’t it a bit like deciding the merit of a stock in hindsight because it has given fantastic yield in the last two years?

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