Introducing All Weather Investing smallcase
Dear Investors,
We hope you’re liking the new smallcases Platform we launched last month. We have introduced a cleaner look with seamless order placing, improved smallcase Profile pages and more
Today, we’re excited to present a unique, first-time concept for India with All Weather Investing – a recession proof way to build long term wealth
Objective behind All Weather Investing
- liquid (enabling you to invest & redeem at the click of a button)
- low-cost (significantly cheaper in terms of fees compared to alternatives) and
- provide higher value than found anywhere else
While Equity (stock markets) is undoubtedly the best asset class to invest in for the long term, it becomes difficult for most of us to overlook market fluctuations in the short term and stay invested for the long term
The idea for the All Weather smallcase arose from a need to build an investment product that can be used by investors in all environments–whether the markets are up or down. This smallcase would generate Equity (stock market-like) returns over the long term, but would also significantly reduce fluctuations to provide a smooth wealth creation journey
Fixed Income ensures a positive, stable return; When the markets are up, Equity generates wealth & when they’re down, Gold provides a cushion to ensure stable returns in the long term
Stable Returns at Lower Risks
To build the All Weather smallcase, our Research team studied many mathematical models and optimizers to build the best algorithm for you to intelligently allocate your money into equities, gold and fixed income. To ensure the smallcase is liquid, we used Exchange Traded Funds (ETFs) to provide this exposure vs stocks, physical gold or fixed deposits
Post-Tax CAGR –
AWI has outperformed all asset classes in last 11 years, from Jun 2007-Mar 2018
At the same time, we have ensured the volatility for this smallcase is minimal. We have tested the algorithm in different market scenarios, including the 2008 crash, to check the performance of the strategy for more than a decade. The table below shows the performance of the strategy in various periods when the markets crashed
| Time Period | Nifty Performance (Market) | All Weather Performance |
| Feb 2015 – Feb 2016 | -42% | -8% |
| Oct 2010 – Dec 2011 | -32% | 2% |
| Jan 2008 – Oct 2008 | -75% | -22% |
Every quarter, our research team runs the algorithm to decide the optimal allocation — how much money should go into equities, gold and fixed income, and you can apply the same allocation with just 2 clicks
How does All Weather stack up against alternatives (FDs, Liquid Funds, Balanced Funds)
Compared to Balanced Mutual Funds (that provides equity & fixed income only), the smallcase provides gold exposure which acts as a cushion in market crashes, and is much cheaper from an expense ratio perspective (the total expense ratio for all ETFs in the smallcase is ~0.65% vs expense ratio for a Balanced Fund at 1.5-2%)
How to Invest in All Weather
The All Weather smallcase should form the core of your portfolio – a low-cost way to obtain stable returns for the long term. You can also look at how you can take a core-satellite approach, but more on that later
With its low volatility, the All Weather smallcase is ideal for you to hold a large part of your portfolio in. You can invest as much as you like in this smallcase without worrying about market fluctuations
Furthermore, setting up an SIP on this smallcase & rebalancing the smallcase quarterly ensures your money works harder for you
It’s free to try All Weather Investing – no charges for buying or exiting this smallcase. You only pay when you commit – a flat fee of Rs. 50 when you place orders to invest more/SIP in or rebalance/manage this smallcase
Build your core with All Weather Investing today, get started here
Taxes & Zerodha charges apply as usual
Hi,
I would like to know about this.
Like if I am investing for 20 years then what will be the approximate probable return? Suppose as minimum SIP investment.
Please reply me as soon as possible.
Thanks n regards
Suhaib .A
Hi,
I would like to know about this.
Like if I am investing for 20 years then what will be the probable return? Suppose as minimum SIP investment.
Please reply me as soon as possible.
Thanks n regards
Suhaib .A
I have a 400 reward points. If I purchase all weather investing small case through reward points , for each sip and any rebalance purchase will I get charged 50 per order. There I could see no lifetime fees. Please provide more details on this.
One of the advatanges of doing an SIP in fluctuating market is rupee average costing. Wouldn’t SIP in All Weather Investing smallcase have a significant cost associated here (50 rupees). Also, the same charge adds up during rebalance too. Any gains in equity and gold ETFs here, and the dividends in liquidbees ETF are hit to some extent by this cost, isn’t it?
If anybody creat a small case, other person can invest on thate case?
if yes, then in that case the creator get any benefit?( Like commission/ profit/ …. )
Is the creator of the small case can promote ? In that case he can earn from it?
Hi Sangram! If you create a smallcase, it would only be visible to you, currently. Enabling sharing of created smallcases is something that’s on our list as well, but nothing in the pipeline just yet. Write to us at [email protected] to elaborate more on your suggestion – we’d love to hear from you 🙂
Hi Vasanth,
1) Is Smallcase Technologies 100% owned by Zerodha? I suppose the smallcase “products” are owned by smallcase and “usage leased” to Zerodha? How does this work financially between Smallcase & Zerodha?
2) Recently smallcase is also available in AxisDirect (I suppose more online brokerages may choose to join in). So, similar to above, what exactly does AxisDirect pay to Smallcase/Zerodha?
Basically I would like to know just how exactly smallcase “earns” its money. For example the flat 50Rs charges for SIP/followup-buying in the same smallcase – that goes directly to smallcase or is there sharing with Zerodha?
I don’t need very low details. Just a birds eye view of how Smallcase Tech makes its money is good enough.
Thanks in advance for any meaningful response.
Hi Raman,
smallcase Technologies is a separate company. Zerodha is the first broker partner. There will be other brokers coming onboard like AxisDirect that you mentioned. You can write to us at [email protected] for other questions pertaining to the operations of smallcase Technologies 🙂
Where to study about small case. Is it related to market sensex, nifty. How to start. minimum investment. Duration of investment. Risk factors. I am regular invester in mutual funds SIP, stocks. Is it profitable. I have not heart about it. Why it is not popular as mutual fund,stock.
Thanks
Hi Narendra! You can find the product guide and all related FAQs in the knowledge base here – http://zerodha-help.smallcase.com/.
We also have a blogpost available on how smallcases are better than mutual funds, have a look here – https://blog.smallcase.com/smallcases-versus-equity-funds-how-a-smallcase-is-better/
If you have more questions, write to us at [email protected]
The charges seems high. Rs. 50 per SIP will make this 10% charges for 5000 rs sip per month in a year
Hi Varun! The recommended amount for All Weather investing is Rs. 25000. The R.s 50 + GST fee is flat irrespective of the amount you invest. However, if you buy the All Weather Investing smallcase during this month (November), all smallcase charges for All Weather Investing will be waived for lifetime – as long as you stay invested in the smallcase.
For each SIP installment 50/- will be charged
Hi Vosu, yup – everytime you place an SIP/invest more order irrespective of the amount invested
Heard, Zerodha is now 2nd largest company in India. is that true ? ( source : https://www.investallign.in/top-10-stock-brokers-india/ )
And also came to know that you are leading direct mutual fund broker (AUM wise)
All the best for future.
1. Will the fund manager keep changing the proportion of Equity / Gold / Debt composition (actively manage) based on market conditions and market expectation or does the mix between these remain fixed ?
2. Also, in equity will it be an ETF or is it select promising stocks that will be bought?
3. Fixed Income (Debt investments) are in low duration or high duration investments?
Hi Vinay, addressing each
1) The proportion will keep changing based on our algorithm, but will not be actively done, will be done on quarterly basis. There’s no concept of fund manager/human intervention, we’re rooted in passive investing
2) Two ETFs for equity – Nifty 50, and Nifty Next 50. If you are interested in having more equity exposure, we would request you to checkout core-satellite approach here – https://blog.smallcase.com/core-satellite-investing/. It will inform you how you can use Smart Beta smallcases along with All Weather to get best core-satellite allocation
3) Fixed Income exposure is via Liquid ETF. The value of your investment only goes up everyday (daily dividends). No risk here
If I will sip should I pay rs50+ tax on each sip ? Or each rebalance ?
Hi Shantanu, yes – a flat fee of Rs. 50 + tax applies on each SIP or invest more or rebalance. No fees to buy or partial exit/complete exit the smallcase
Hi sir, my question is ,in smallcase there are 20 stock . Then what is dp charge ? It flat 13.5 or it 20*13.5=270. Plz explain
Hi Shubhankar, DP charges would apply on each stock (not shares/quantities) – so for 20 stocks sold on a day, it would be Rs. 270 + tax
Hi vasanth, how it is better than mutual fund ?
Some advantages of investing in smallcases over mutual funds
Simple to Understand
smallcases reflect understandable ideas & themes like rising rural demand, increasing internet penetration, zero-debt companies, affordable housing, GST implementation etc – making it easier for you to understand what they’re taking exposure to
Cost-Efficient
With smallcases, you only pay when they transact (flat fee approach on Zerodha with zero brokerage), vs an expense ratio that investors pay on a daily basis
Transparent & Flexible
While investing in a smallcase, you have a clear idea of what stocks they hold, as there is direct ownership of stocks in their demat account. This also means you have an option to customize the constituents of a smallcase and change their weights whenever they want to
Use-Cases
Number of mutual fund types are limited, whereas any actionable idea can be a smallcase (be it theme-based like Smart Cities, Speciality Chemicals or strategy based like Magic Formula, Dividends or even sectors like Insurance that aren’t available in mutual funds yet)
Liquidity
A smallcase is as liquid as the stocks/ETFs in them, so can be transacted (bought or sold) anytime the markets are open
Thanks a lot for your reply
Hi, I have recently opened a account with Zerodha. I am new to small case and I don’t have any. Is this smallcase good to start. How much can I invest. If there any auto re balance in portfolio of this smallcase will it reflect in my account and How Will I, be charged then ?
Hi Avinash – yup, smallcases are a great way to get started investing in equities. The All Weather Investing smallcase gives you exposure to fixed income & gold along with equity (making it the best first step to investing in smallcases)
There’s no auto-rebalance/auto-trades placed – you’ll be able to see all stocks/ETFs bought in smallcases on Kite, however do take care to not sell these stocks via Kite as this is not reflected on the smallcase interface leading to incorrect P&L/returns
Certainly looks a good product at first look. More details and demo would help.
Sure Kuldip, coming soon – https://blog.smallcase.com/tag/all-weather-investing/
Hi,
Really it is not clear.. Waiting for webinar and detail link…
Sure Pavan, will ping you when they’re up
Tell me—-min amt/lock-in period/entry and exit charges and its difference in comparison with liquid Fund investment,all incidental charges as well as return pattern
Hi Atish, the minimum amount is Rs. 5753, keeps changing when markets are open though
No lock-in periods, the concept is however most effective for the long term. No additional fees on entry/exit, usual Zerodha charges apply. When you invest more/SIP/rebalance this smallcase, you’re charged a flat fee of Rs. 50 + tax
How about Taxation on the Gains? Is it as per Equity or Debt?
Individual ETFs in the AWI smallcase have their own tax implications:
Equity ETFs (NIFTYBEES, JUNIORBEES) will be taxed like other equity instruments – 15% tax on short-term gains & 10% tax on long-term gains over Rs 1 lakh
Fixed Income ETF (LIQUIDBEES) does not attract any tax liability, as it only issues dividends
Gold ETF (GOLDBEES) is also taxed like debt funds or bond ETFs – short-term gains added to income (3 year holding period) taxed at 20% after indexation
Good
Why only reliance etfs are available in that?
You should provide option of Etfs managed by other AMCs also
Hi Vishvesh, we were looking to include only ETFs that had sufficient liquidity for orders to go through instantly. Hence the choice
ICICI ETF are also having good liquidity, i have 2 of them in my portfolio already
Hi Shreya, got it. We have no such rules that we will not include any other ETF. Our Research decides at the time of rebalancing which ETFs to include to represent the mentioned asset classes by considering all the factors like liquidity, cost, etc
Would like to understand more about this.
Hi Nitin,
Can this investment used for margin requirement collateral for trading FnO?
What other option zerodha provides to get some income from dead money sometime to be kept in DP account? like collateral options…
Regards
Pradeep
Sorry not Nithin, Vasanth 🙂
Hi Pradeep – yes, you can definitely do that. When you rebalance though, it should be unpledged for orders to go through
Sounds good. How to start with it.
Hi Prakash, you can get started here smallcase.zerodha.com/awi or directly here https://smallcase.zerodha.com/smallcase/SCAW_0001
ELABORATE AND EXPLAIN
Hi Naresh, you can check more details here.We’ll be having a video/webinar about this soon. Will ping you the link then
Please ping video/ webinar link to my mail also
You can read more blogposts about All Weather here as well https://blog.smallcase.com/tag/all-weather-investing/
I am interested in investing in All Weather Investing but not sure how to do it.
I certainly require more details about the product before I start investing.
Please ping video/ webinar link to my email also.
Thanks,
Nikunj Poddar
Hi,
Need to know more about this. Like if Im investing for five years or more then what will be the probable return? Suppose investment is of 1 lack Rs.
Thanks n regards
JASWINDER SINGH
There’s no fixed returns here Jaswinder, given there’s equity & gold exposure. As explained – the fixed income ETF will give you positive returns through (similar to bank deposits/FD rates). The equity ETFs will generate wealth in up markets, and gold will provide a cushion in down markets. You can expect stable returns over the long term, at much lower risks 🙂 If you check the graph on the smallcase Page for the last 11 years – you can see how less volatile the smallcase performance has been compared to Nifty
I don’t know how to use smallcase, have you introduced any plugins for the existing kite? Please help to use it
Hi Mag – you can get started with your Zerodha/Kite credentials here smallcase.zerodha.com – check it out. We have a chat section inside the platform where you can chat with us