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After 47.2% between Feb & May, PSU Bank Tracker Portfolio takes a breather with 10.9% – Update 3

It’s time for 3rd quarterly update of PSU Bank Portfolio. For benefit of those who do not know the whole story behind this tracking portfolio, I would briefly share the purpose of this portfolio:

In November 2013, like many others, I also felt that PSU Banks (as a group) were grossly undervalued and would give better returns than broader index in next 5 years. This portfolio tracks my gut feeling on a quarterly basis and was started with 10 stocks having equal weights.

Initial Portfolio PSU Banks

To know more details and thought process behind this portfolio, please read the first post in this series here. After this there have been 2 quarterly updates which can be found at below links:



In last 3 months, markets have been kind to PSU Banks (except to Syndicate Bank, which was in news for a bribery case linked to its Chairman). The portfolio has given a return of 10.9%, which is similar to that of broader index (11.3%).



Now if you compare this performance with that of previous quarter, i.e. 48% (against market’s 18% – details), then this one can be shrugged off as a pathetic one. But frankly speaking, I don’t think 10.9% in one quarter is a bad performance at all. Even if I am not beating the market, a performance which is better than after tax returns of safer, risk-free assets is acceptable to me.

In last 9 months, this portfolio has given returns of 40.5% (excluding dividends) and 43.7% (including dividends), which is better than Nifty’s 29% return in same period.

9 Month Banks Portfolio Returns
And surprisingly, it has been the larger banks which have performed better than than their smaller counterparts. And we always thought that smaller stocks moved more and faster.

Current Bank Portfolio Value
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Written by Dev Ashish

Founder - Stable Investor Investing | Personal Finance | Financial Planning | Common Sense

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