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5paisa Smallcase Review - Invest based on theme, idea or strategy

Published on Saturday, February 2, 2019 by Chittorgarh.com Team | Modified on Monday, October 7, 2019

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5paisa is a 2^nd largest discount stock broker in India. They are among the fastest growing and most advanced online broker offering services in equity trading, mutual funds, and Insurance.

5paisa is a venture of India Infoline (IIFL), a prestigious group offering a range of financial services in India. IIFL core business areas include financing, wealth & asset management, broking, mutual funds, investment banking, realty broking and advisory services.

5paisa is famous for its cutting-edge online trading platform and ultra-low brokerage charges for trading at BSE, NSE and MCX. 5paisa charge flat Rs 10 per executed order across the trading segments.

5Paisa small case is a key offering of 5paisa trading platform. Small case was launched in Jan 2019. It is available free of charge to all its customers.

Why smallcases needed?

A portfolio of stocks brings many benefits to an investor. It helps in diversification, risk management and better control over investment. But, creating an equity portfolio requires serious effort. It requires an understanding of markets and different sectors. It takes time and expertise to create and manage a portfolio.

Considering this, 5paisa has introduced a new offering called 'smallcase'. The product helps investors to invest in stock markets and create a portfolio in an easy way. It eases them from the hassle of monitoring markets, picking stocks and managing the portfolio.

What is a smallcase?

A smallcase is a portfolio or basket of selected stocks or Exchange Traded Funds (ETFs) built around an idea, strategy or theme. You can choose from more than 50 smallcases created around different themes, ideas and risk levels. Each of the smallcase is created by the 5 paisa research team after conducting a technical and fundamental analysis of the stocks.

5paisa Smallcase Examples

Pharma Rush
With smallcase, you can invest in ideas or sector instead of a particular stock. For example, if you feel that the Pharma sector will do well in the next few years, you could choose a smallcase build with top Pharma stocks. When investing in this smallcase, you will be buying a number of stocks of pharmaceutical companies in one single click. The shares are bought in the ratio specified in the small case.
Low Risk - Smart Beta
This smallcase is a low volatile portfolio for passive long term investing. It includes 13 to 15 stocks which have potential upside >10% a year with a relatively small lower side risk. This smallcase picks only liquid stocks from top 150 market cap stocks listed on NSE.
5paisa Top Pics 2019
Rising Rural Demand (Companies who will benefit from an increase in rural consumption)
Dividend Aristocrats (companies offering consistent dividends for the last 10 years)

Types of smallcases

Currently, there are 4 types of smallcases available with 5paisa-

Thematic Smallcases
These are based on a specific theme or trend.
Model-based Smallcases
These are created around on a particular fundamental or technical investment parameter such as zero debt, dividends and earnings growth etc.
Smart Beta Smallcases
These are based on large-cap stocks and are created with the goal to deliver more than market returns.
Sector Tracker Smallcases
These cover a particular sector.

How a smallcase is created?

A smallcase is created in 4 steps as follows-

Defining the Universe The research team decides on the type of companies to be included in the universe as per the decided strategy or theme of the smallcase.
Stock Screening The team then individually picks stocks to be included in the universe. Each stock is analyzed based on company fundamentals and financials. A range of parameters, both qualitative and quantitative, is then applied to screen stocks.
Assigning Weighting to Stocks The stocks are then assigned weights in the portfolio based on market cap, management, financials like revenue, profits and future prospects.
Rebalancing the Smallcase Each smallcase has a re-balancing schedule. wherein the research team reviews the performance of the smallcase. The team adds/drops stocks in sync with the strategy or theme.

Benefits of the 5paisa smallcase

Choose from 50+ smallcases as per your needs and investment philosophy
Facility to increase investment in a smallcase (lump sum or SIP)
Facility to completely or partially sell the smallcase
Risk management through diversification
Customize the smallcase as per your needs
Get complete ownership over your portfolio
Zero management fees
Pay only when you transact
Suitable for first-time as well as experienced investors
Save time
Transparency
Monitor and manage your smallcase anytime, anywhere

How 5paisa smallcase is different from mutual funds?

A smallcase like a mutual fund is a basket of stocks created around a specific theme or strategy. However, a small case is better than mutual funds in some aspects like

Lock-in period
Some mutual funds have lock-in periods within which you cannot redeem your units. In a smallcase, you can sell it completely or partially anytime.
Management Fees
Mutual funds have management fees. There are no management fees in small cases. You pay only when you transact (buy or sell).
Transparency
Smallcases provide you complete transparency in understanding where your money is invested. This helps you take investment decisions as per your risk appetite.