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Money Sep 3, 2011

Monkey Portfolios continue to score over experts, indices

By Firstbiz Staff

Hello again! We've just wrapped up the second week since launching our two randomly-selected Monkey Portfolios.

During the last trading week ended 2 September - which had just three trading days due to Eid and Ganesh Chaturthi - we introduced some formidable competition to our Monkeys - the experts' picks.

Our Monkey portfolios - which involved the random selection of 10 stocks each from the BSE 100 and BSE 500 lists to form an initial Rs 10 lakh portfolio each - outperformed their benchmarks (Sensex and Nifty) in the first week.

Our Monkey portfolios outperformed their benchmarks in the first week. Photo by David Crosby/Flickr

But they should not take their luck for granted. They now have serious competition not only from the benchmark indices but also against the top picks of 10 brokerages. A daunting challenge indeed.

Were our Monkeys intimidated? Doesn't seem like it. Between 26 August and 2 September, the Sensex, Nifty and the experts' portfolio managed to post similar returns, of around 6.1 percent (See table).

Monkey portfolio 1, meanwhile, ended the week with a 5.6 percent gain, just 50-odd basis points behind the benchmark returns. (One hundred basis points make one percentage point.) All 10 stocks in the portfolio advanced (See performance).

Monkey portfolio 2, on the other hand, scampered ahead of the three benchmarks with an exuberant 7.2 percent gain. Nine out of 10 stocks surged in this portfolio (See here).

Overall, since their launch on 19 August, the Monkey portfolios managed to beat both the Nifty and Sensex: while the indices gained about 4 percent during the entire period, the Monkey portfolios added on more than 5 percent each.

For now, our Monkeys can hold their heads high and continue on their merry random way. Catch us next week as we continue to track the journey of the carefree (Monkeys) and the careful (experts' picks).

But they should not take their luck for granted. They now have serious competition not only from the benchmark indices but also against the top picks of 10 brokerages. A daunting challenge indeed.

by Firstbiz Staff

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