TABLE OF CONTENTS
The ‘Equity’ section of the portfolio report provides a detailed analysis of the equity segment of your portfolio's performance, diversification, benchmark comparison, and risk metrics. It offers a comprehensive deep-dive, to help you make informed decisions about future buys and sells, based on the current health of your investments.
It covers the following aspects:
1. Summary
2. Performance
3. Diversification
4. Benchmarking
5. Risk Analysis
Summary
An overview of your equity portfolio’s performance across different categories, including quick daily insights, portfolio score, performance summary, and key risk and return ratios.
1. Quick Daily Insights
Daily insights into your equity portfolio's performance, stocks in motion, 1-day gain, unrealised P&L, current value, and invested amount.
2. Portfolio Score
This provides a weighted average of Trendlyne’s Durability, Valuation, and Momentum scores for your portfolio stocks. Durability assesses a company’s financial strength, Valuation evaluates pricing based on metrics like P/E and P/BV, while Momentum indicates buyer interest, signalling bullish or bearish trends.
3. Performance Summary
Review the performance of your equity investments, including total investment, unrealised profit and loss, and the percentage gain or loss.
4. Diversification Summary
Shows you how your equity portfolio is diversified across stocks, sectors, and market capitalization.
5. Benchmarking Summary
Provides a comparison of your equity portfolio’s performance, valuation, and growth with the benchmark Nifty 50 index.
6. Risk Analysis Summary
Assesses the risk and volatility of the stocks in your equity portfolio.
Performance
This gives you a detailed breakdown of your portfolio’s performance across various sections, including portfolio performance, profit & loss by market cap, stock-wise performance, sector-wise performance, and share price performance.
1. Portfolio Performance
An overview of your portfolio's performance, including the total invested amount, unrealised profit and loss, and the percentage of gain or loss.
2. Profit & Loss by Market Cap
A heatmap categorizes your portfolio's gains and losses by market capitalization (large, mid, small), helping you identify which market cap segments are performing well and the proportion of unrealised gains or losses among them.
3. Stock Wise Performance
Looks at the individual stock performance, with a breakdown of your portfolio's profit and loss. Gain insights into the top-performing stocks and the percentage of unrealised gains or losses from each stock. You can also check the P&L by return on investment (ROI).
4. Sector Wise Performance
Portfolio performance (P&L) is categorised by sector, offering insights into top-performing sectors and the percentage of unrealised gains or losses in each sector.
5. Share price performance
This section provides an overview of how your portfolio stocks have historically performed over various timeframes, such as a day, month, and year. It offers insights into the overall performance based on historical data, independent of your purchase price or date.
Diversification
This section offers insights into the diversification of your equity portfolio.
1. Stock Distribution
The distribution pie chart illustrates the diversification of your portfolio among different stocks. Achieving a balanced diversification is crucial for minimizing market risk and volatility. This involves investing in stocks across various sectors and market capitalizations. It's important to strike a balance, as excessive diversification can potentially lower expected returns more than it reduces risk.
2. Investment Style
This section decodes your investment style, indicating whether you prefer growth, value, or growth+value stocks. Growth stocks are characterized by high revenue or net profit growth over the past three years. Value stocks have a P/E ratio of less than 20 or a PEG ratio between 0 and 1. You may also be a combination of the two styles.
3. Sector Distribution
Explores how your portfolio is distributed among various sectors. An ideal portfolio invests in stocks from different sectors to reduce market risk and volatility.
4. Market Cap Distribution
This lets you examine your portfolio's distribution across different market capitalizations, including large, mid, and small caps. While large and mid-cap stocks are generally considered less risky, they may lack the aggressive growth potential associated with small-cap stocks.
Benchmarking
This section offers you comparisons of your portfolio against various metrics.
1. Valuation Metrics
Price-to-earnings (P/E) and price-to-book (P/B) ratios are utilized to evaluate your portfolio's valuation, comparing these metrics against the benchmark Nifty 50 index.
2. Growth Metrics
The weighted average profit growth of your portfolio stocks is checked in comparison to the Nifty 50, and lets you see whether your portfolio is outperforming or underperforming the benchmark in financial metrics.
3. Other Financial Ratios
The price/earnings-to-growth (PEG) ratio is a stock's price-to-earnings (P/E) ratio divided by its expected earnings growth rate. PEG ratio below 1 is considered undervalued. The dividend yield is a stock's annual dividend payments to shareholders expressed as a percentage of its current price.
Risk Analysis
This section checks key risk and return metrics to calculate your risks and returns over 1 month, 3 months and 1 year. You can also generate insights for your portfolio.
1. Liquidity Check
The illiquidity percentage in your portfolio indicates the portion that may pose challenges in selling due to low trading volumes on exchanges, potentially resulting in losses.
2. BETA
Beta (β) measures the volatility or systematic risk of your portfolio against the Nifty 50. A portfolio with beta higher than 1 is more volatile than the Nifty 50. Note that a portfolio can have a lower beta and still have higher total risk due to firm-specific risks. Total risk consists of systematic and firm-specific risks.
3. Standard Deviation
The standard deviation of a portfolio gauges the extent to which investment returns deviate from the average probability distribution. A higher standard deviation indicates greater risk, characterized by volatile returns, while a lower standard deviation suggests reduced risk, associated with more consistent returns.
4. Sharpe Ratio
The Sharpe ratio measures risk-adjusted returns. It checks if the excess return gained is in line with the extra risk you took. A bigger Sharpe ratio means your investment did well. If the ratio is higher than 1, it's good. If it's more than 2, it's very good. And if it's 3 or more, it's excellent.
5. Value at Risk (VAR)
Value at risk is a measure of the risk of loss of investment. It estimates how much a set of investments might lose, given normal market conditions, in a set time period.
