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Thursday, June 07, 2007

Portfolio Performance Update

Here is the update on the performance of my portfolio.

Not surprisingly, I underperformed in 2006-07 after overperforming for the last 5 years. I have been short on ideas in the Indian market.

It is not that I lost money during the year; on the contrary, I made 8% on the beginning value of the portfolio. But the indices did better - Nifty at 12% and Sensex at 16%.
My overall margin of over-performance for the 6 years is still way better at 316% 204% over Nifty and 288%176% over Sensex. The over-performance is a little over-stated since my portfolio includes dividends and the value of indices do not. However, the difference is still not significant, considering that the published annual dividend yield of Sensex during these years has ranged only between 1.13-2.61%, translating into 8%-14% difference at compounded rates. S&P CNX Nifty's dividend yield is at a wider range of 0.59%-3.18% translating into 4-20% difference in total.

It is disheartening to note that I have made only at government yield levels (National Savings Certificate and Public Provident Fund yield 8%) after taking the risks I have taken during the year. However, the consoling factor is that it is only 1 in 6 years.

Modified July 21st 2007

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