New smallcases have been launched by Windmill Capital!

Over the past couple of months, we’ve received multiple requests and queries from our investors around the introduction of new smallcases. The Windmill Capital team takes these requests seriously and hopes to deliver what our users wait for.😎
The launch of 3 new smallcases is precedent to that.

The team has come up with 3 ETF smallcases that we believe will add significant value to an investors’ portfolio. Without further ado, let’s dive right in to understand the anatomy of the new smallcases.

What are ETFs and what are ETF smallcases?

An ETF is an investable & tradable instrument that tracks the performance of an index like Nifty/Sensex, a commodity like gold, bonds, or a basket of such assets. ETFs are very similar to mutual funds, the main difference being the former is listed on exchanges and trade just like stocks. Moreover, it would be hard for an investor to buy all stocks of an index in the given weights, especially for an amount that is as low as say ₹1,000.

An ETF solves this problem by:

• Giving the investor access to many stocks across various industries
• Allowing the investor to invest in a small quantity of the commodity at a reasonable price

For example, by investing in Nippon India Nifty BeES ETF one would get returns close to the Nifty50 Index, as this ETF tracks the performance of the Nifty50 Index.

ETF smallcases are smallcases that have ETFs as their constituents. They’re built using ETFs to provide diversified exposure to various asset classes at a low cost.

Some of the existing popular ETF smallcases that we have are All-Weather Investing, Equity & Gold and Top 100 Stocks. Along with these, we are introducing 3 new ETF smallcases

1. Global Opportunities:

For the longest time, our investors wanted a way to be exposed to buzzing global stocks, especially those listed in the US. Well, here it is. The Global Equity smallcase consists of 3 ETFs that represent the best of the largest Indian and US companies.

• The smallcase invests in the top 100 Indian companies using Nippon India ETF Nifty Bees for top 50 Indian companies, Nippon India ETF Junior Bees for 51–100 Indian companies.
• It invests in the US-listed companies with the Motilal Oswal NASDAQ 100 ETF for the top 100 international companies listed on the US NASDAQ exchange.

Why should you be interested in this smallcase?

• Large-cap companies are usually well established and adding such stocks to the portfolio increases the stability of the portfolio.
• It provides exposure to global technology brands including Facebook, Amazon, Apple, Netflix, Alphabet, etc.
• International equity has a comparatively lower correlation with Indian equity, thereby offering diversification benefits.

2. Top 250 Stocks:

As the name suggests, the Top 250 Stocks smallcase helps investors systematically invest in India’s top 250 companies. It uses 3 ETFs that represent the 250 largest Indian companies. The smallcase invests in top 250 market-cap companies using Nippon India ETF Nifty Bees for top 50 Indian companies, Nippon India ETF Junior Bees for top 51–100 market-cap Indian companies and Nippon India Nifty Midcap 150 ETF for top 101–250 market-cap Indian companies.

Why should you be interested in this smallcase?

• As mentioned before, large-cap companies are usually well established and adding such stocks to the portfolio increases the stability of the portfolio.
• Mid-cap companies provide exposure to companies with potential for growth and expansion.
• The weights are adjusted to maximize the return potential while controlling the risk assumed in the portfolio.

3. Equity & Debt:

This smallcase invests in Equity & Debt, fixing their weights to 60% and 40%, respectively. While the smallcase uses the same ETFs as mentioned above to invest in the top 100 market-cap companies in India, it also invests in the Edelweiss Bharat Bond ETF-April 2030 ETF for exposure to long-term debt.

Why should you be interested in this smallcase?

• Investing in large, well-established names has its perks, as mentioned earlier in the article.
• Debt has lower volatility and that helps in managing the volatility of the portfolio as a whole.
• Diversification in asset classes (equity & debt) reduces the underperformance risk of either asset class and increases the stability of the portfolio.

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