RMI India Models Outperform

Letting it run.
India’s lack of performance was in the news all this year. Hence RMI India’s model portfolios had to face the heat themselves. What will happen? Will RMI India 30 do well? Is it a low correlation year for it? Will this be an underperforming year? Will it conserve cash atleast? We listened and defended the RMI India 30, telling you to believe in the model. Even if RMI India 30 did not give the annualized 30%, it outperformed relative to it’s peer and conserved.
We explained that owing to its low correlation nature, there could be a time when RMI India 30 could fall while the markets rise. We also started benchmarking RMI India 30 selection to CNX Mid Cap as RMI universe was mainly mid cap. So without changing anything we let the model run.
Active India 10 and version (2)
Keeping the blue chip, liquidity and quality in mind we started the RMI India Active 10. This was more executable, more quality, the tradeoff was better, as quality and execution prevailed over large model returns. “Give me 10% less than RMI India 30, but give me quality.” Though Active India 10 was built from CNX 100 we benchmarked it to the Nifty 50. The CNX 100 is not at a new high yet. The New Active version (2) was created because we wanted to ward off the possibility of capital erosion by overlaying more stops.
Where are we on 22 Dec?
Both RMI’s have beaten their benchmarks. Now that is not a great feat, it’s Active’s job to beat the market. We don’t want to even get into risk weighted and post fee performance. So if your PMS (portfolio management service) has not even done plain vanilla outperformance, leave aside risk weighted and discounted for fee, he (she) definitely deserves a few inconvenient questions. “How could you not do that my selected fund manager?”
Not all years are the same. In a sideways market Active can suffer as the system whipsaws and takes you in and kicks you out. For all those who diligently tracked our models with real money, we see a sense of satisfaction. Shortly we are introducing our version (3), a much improved Active model, which we have already tested for Canada, US and UK. Looking forward a great 2014.