Investment Outlook and Large Cap Portfolio Note

Positive Outlook and The Portfolio Outperforms by 6.2%

Report dated: 20th May 2015

JainMatrix Investments presents its Investment Outlook, and the May 2015 update of its Retirement LC Model Portfolio.

Investment Outlook Note

  • It’s now one year since the new government was elected in at the center. We are fairly pleased with this year in the economy. Without many flashy and headline oriented statements, the government is building stability and solidity in the governance. The achievements include successful auctions in Telecom and Coal mines, improvements in the Power and Coal sectors, efficiency in Parliament and improved foreign policy and exchanges. The LPG cylinder subsidy scheme is a successful pilot for other subsidy programs. Petrol and Diesel seem to be subsidy free.
  • Much more needs to be done, of course. But well begun is half done. Note that stock market investors till some years ago gained most from sectors free of government interference and control. Going forward, my confidence is growing that more sectors will be added that are free. The economy will reap benefits from improvements in ease of doing business, economies of scale and the Make in India – Export to the World initiative.
  • The INR/USD rate is now 63.73, and we now peg this to be in the range of 62-66.
  • The recent spate of volatility in the Indian stock markets is a normal short term correction after a strong rise over the last 20 months.
  • The Indian market continues to be a magnet for global investment funds, as the Indian economy has the best outlook of the BRICS countries. It is also among the few large economies growing fast.
  • Further we have seen over the last one year that the Indian investor too has come back to the markets. This is partly because other asset classes like Real Estate and Gold are not as attractive.

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In terms of outlook we expect the next few triggers to be:

  • Reductions in interest rates by RBI.
  • Improvements in the Gold asset class with the Gold monetization scheme, which may reduce imports and reduce illiquidity and improve returns from this asset.
  • Infrastructure improvements including fast tracking of projects and better PPP structures.

In terms of Risks we would identify

  1. Excessive volatility in INR-USD exchange rates or crude prices
  2. Opacity and slow resolution of foreign ownership and investment taxation issues (Vodaphone, Nokia, MAT, etc.)
  3. Poor or uneven rainfall in coming season

JainMatrix Retirement Large Cap Model Portfolio Theme

  • We renamed the portfolio as the JainMatrix Retirement Large Cap Model Portfolio.
  • The objective of the Retirement LCMP is to outperform the Sensex and Nifty by 5-10%. We have achieved this consistently over the last 29 months.
  • The seven stocks in the portfolio are from seven different sectors, but the overall focus is on Banking, Consumption, Exports and Infrastructure.

Portfolio Performance

  • The portfolio has only 7 BUY shares.
  • The RLCMP continues to perform well. On average the 7 Buy recommendation shares were up by absolute 55.5% and annualized 24.6%.
  • The Sensex and Nifty were up by 18.3% and 18.0% annualized in the same period.
  • The JainMatrix active Retirement LC Model Portfolio thus outperformed by 6.2%.
  • Investors need to continue to invest in these shares in a SIP mode for safe long term returns.

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Some previous notes for this Portfolio

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This document has been prepared by JainMatrix Investments Bangalore (JM), and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JM. It should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, JM has not independently verified the accuracy or completeness of the same. Neither JM nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. Recipients of this report should be aware that past performance is not necessarily a guide to future performance and value of investments can go down as well. The suitability or otherwise of any investments will depend upon the recipient’s particular circumstances and, in case of doubt, advice should be sought from an independent expert/advisor. JM has been publishing equity research reports since Nov 2012. JM is voluntarily compliant with SEBI (Research Analysts) Regulations, 2014. Any questions should be directed to the director of JainMatrix Investments at

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