ValuePickr Forum

Birthday GIft Portfolio

I want to create a portfolio as gift for my daughter’s upcoming birthday.
I already have my personal investments in mutual fund and don’t want to go by mutual funds.

She has a long way to go before she will actually use it. So I have only 2 criteria

  1. Select from Nifty 100 companies
  2. Companies which will provide peace of mind and needs very low tracking/assesement. Should not burst like Yes bank. If whole market bursts and selected company bursts then that is another thing.

I am fine with low than mid or small cap indices returns.

Based on above criteria I have selected below 10 companies with 10% allocation in each

  1. HDFC Bank
  2. KOTAK Bank
  3. Britannia
  4. Nestle
  5. ITC
  6. TCS
  7. MARUTI
  8. PIDILITE
  9. Abbott
  10. ASIAN PAINT

Request your review and suggestion if anything can be added to or removed from list.

7 Likes
  1. Dr. Reddy / Cipla / Abbott (or similar),
  2. RIL
  3. Havells / Whirlpool
  4. UPL / PI Industries

Rest is fine. Should have 1-2 names per sector.

2 Likes

@sunilsurana
To be true this is exact a thread I looking for in VP was wanting to start. I am looking to builtup a portfolio for my son and daughter. My kids are in early 20s and I assume that in their career making age for next 8-10 years they shall hardly get time for tracking.

Most of the companies mentioned by you are matching to my list.

1 HDFC Bank
2 Nestle
3 ITC Ltd
4 Asian Paints
5 HUL
6 Abbott India
7 Biocon
8 3M India
9 Pidilite
10 HDFC
11 TCS

Kotak Bank- In Banking I was thinking only of HDFC Bank.
Maruti- i thought about but wonder what disruptions will come in auto sector in next 8-10 years.
HDFC- One name from NBFC+housing finance will be always their with ups and downs.
Reliance- I am having in my own portfolio but opted not to have in Childrens’

Valueable feed back needed from you on my thinking line and if any name should be altered.

Please also suggest what should be weightage assigned. Should it be equal to all?

Thanks and stay safe
Gautam

3 Likes

Sorry to barge in here, but why is HDFC Bank preferred here over Kotak Mahindra?

KMB has a lot of value-unlocking remaining though.

Both have provided similar returns in the past 3,5 and 10-year periods.

Going ahead, doesn’t it bother that Aditya Puri is retiring?

3 Likes

Btw your daughter is so lucky to have a father like you (I was not lucky in those 1970’s :slight_smile:) .

You got a pretty solid, high quality large cap basket and the chances of collapsing like Yes bank is unlikely (but you never know). Though your portfolio companies provide you with peace of mind, but it is advisable to at least keep a track of your companies regularly. Things could change dramatically if the company / management does silly in their growth strategies. Once you sense that, then you should be existing the stock and adjust the portfolio.

Just few thoughts:

  1. Your portfolio is largely dominated with consumption theme, which is okay. Usually they trade at premium, so not sure at what price you planned to buy or bought them?
  2. As these are large caps, which should provide at least 15% compounded returns. However, inclusion of 1 or 2 very high quality mid/small cap names at her current age might provide higher returns in the long term. Hoping that these 1 or 2 high quality names turn out be large caps by the time she starts to use it. In case if you decide to add mid / small cap names, then try to focus on companies that would be big beneficiaries due to shift that might happen from China make/China imported to India make/India exported. I have a feeling, this is gonna be big game changer for those Indian companies in the coming decade.

In any case, all the best.

Disclosure: I do not own any of the stocks mentioned by you except Abbott India.

3 Likes

HDFC- do u chose it for nbfc part or any subsidiary? I feel it’s subsidiary may have better growth like HDFC life and AMC going ahead.
Abbott and Biocon- why do you chose these? What makes you think these will remain consistent compounders?
Disc. Invested in HDFC life and AMC so views maybe biased

Overall good picks. Why you have 2 banks? Maybe have one and allocate some to insurance and AMC for financials…approx 25% allocation to top quality financials with mix of a bank, life insurance and AMC would look good to me.
Also what makes you think Abbott would be a consistent compounder going ahead?
Lastly, one must be careful with maruti and tcs…both are prone to disruptions little more than your other picks.
Disc. Same as other posts

1 Like

I have abbott in my portfolio. Rational behind is its a domestic pharma play very similar to fmcg companies. Its business is not affected by usfda. Also they keep on launching many products and they holds a good market shares also in their products. On top of all they also need not to give royalty income to parent group.

Please others also give their view.

Regarding new launches, does Abbott launch products from its global portfolios in India? Does it leverage r&d strengths of its parents or completely relying on its indian r&d? 0 royalty is a surprise to me…is this a norm in pharma MNCs? Thanks

Some point about abbott i know, might answers some of your points

They spend very less in R&D
They dont launch products from global portfolio, thus zero royalty.
They spend good amount in brand building (thus advertising).
They have one more abbott unlisted subsidiary.

What I understand, abbott want to leverage india’s comsumption growth story in pharma.

@Investor_No_1
HDFC- The return may be lesser but main aim is low tracking.
Biocon - As whole of pharma sector is prone to strict USFDA regulations. I thaught of just keeping Abbott. May decide against Biocon when final buying.
It’s basically our way of making an FD or Post Office deposit which our parents did for us.
Regards

Thanks for your inputs.
The only reason i had not included AMC and insurance companies was because most have them have listed just recently. So no history about shareholder treatment. Also I haven’t studied them. In case if find anything good then I will swap Kotak with AMC/Insurance

Agree about Maruti and TCS part. Planning to switch Maruti with Reliance and TCS with HDFC

Thanks for suggestion.

  1. I plan to buy them whatever prices they are next month. Agree that prices are at premium but not able to find high quality company at reasonable price.
  2. If you could suggest any that would be helpful. Couple of names I could think of is PI
1 Like

Hi Sunil ,
The companies chosen by you are solid . But i would suggest you to increase the horizon.
You should reduce % from ITC , Maruti
and add Infosys , Bharti Airtel , HLL , HDFC Insurance , HDFC AMC .

In coming time there are bright chances for companies in telecommunication , AI , Insurance ,

Thanks
Vikas

I don’t think that leaving of Aditya Puri would make a difference.
The most important responsibility of the company’s top management is always to find a competent successor .They are already in deep exercise for it since two years .
Its always better to have change of guard at the top.

Cheers

1 Like

It’s a very good set of businesses. The only confusion i have out there is with TCS and MARUTI, i think you can shift it with BAJAJ FINANCE and HDFC LIFE or UNITED BREWERIES if you like.

2 Likes

You have a very good portfolio. Focus on essential products with good management and clean balance sheet. Saurabh mukherjea style of consistent compounders, coffee can style of investing. Which I follow too.
Keep it up.

Maruti is the only cyclical.
I’d add an Amc. Huge growth ahead. Asset light business model.

Good portfolio.Apart from above you may study following businesses HDFC Life, Whirlpool, Godrej Consumer, Godrej Agrovet, Berger Paints, L&T Technology Services, Honeywell Automation, Bajaj Finserv, Tasty bite
Insurance, Agri, Agro-chemical, Niche Technology, Food processing - quality & strong businesses !.