Dear Advisory Partner,
The last four months have seen extreme volatility in markets, led by mid and small cap stocks that tanked anywhere between 25% and 60%. There was a shift from mid and small cap stocks to large cap stocks as seen by the divergent performances of mid and small cap indices with the large cap index.
The market also sold off stocks of companies that saw some short term issues that could marginally impact near term growth prospects. Stocks with poor corporate governance or perceived poor corporate governance were hammered to say the least.
In all the carnage, stocks with fundamentally strong prospects were also sold off.
Given your growth oriented portfolios, many stocks in your portfolios with good long term growth prospects, did see sharp falls. However, given the portfolio itself with well calibrated weights to stocks, you did not have to do anything to your portfolios except ride out the market volatility.
Many of you showed concern over some stocks that fell and given that our analysts were tracking every stock closely, we assuaged your concerns. Some of you wanted to buy into declines and we checked your portfolios weights and gave you the stocks to buy. All of you held on to your portfolios and did not take any hasty short term decisions.
The 1st quarter of fy 2019 has seen strong results from the stocks in your portfolio. There have been some misses as well more in terms of short term issues that are more perceived than factual and these will correct itself down the line. The stocks in your portfolio are fundamentally sound, have strong growth prospects and are largely transparent with good corporate governance.
We do see managements sounding highly confident on future growth prospects and that for us is the strong indication of the way the economy is moving forward. Yes there are many macro and micro risks that could play up, but these risks are taken care of through a rigorous portfolio selection process.
We have formed a highly trusted relationship where our diligence in markets and investments has gained your confidence and trust and your faith in us gives us our payoff.