As per the recent guidelines, all smallcases should now have a research report which covers all constituents and their respective rationales for being part of the smallcase. The report will first be created at the point of publishing of smallcase and henceforth get updated at every rebalance.
The report will be called “Model Portfolio Report” for smallcases created by RAs, while it will be called “Portfolio Report” for smallcases created by IAs
The report will replace the existing “Rebalance Report” which is currently created at every rebalance
The report will contain constituent wise commentary which describes the rationale for the constituent being present in the smallcase
If any constituent is added/removed or undergoes weightage change in a rebalance, then the report will also cover such constituents along with relevant reasons for the same
For RAs, adding constituent wise rationale is now mandatory and required for publishing a smallcase as well as rebalancing
For IAs, adding constituent wise rationale is optional. The portfolio report will contain all other information and rationales for any constituents if added
A sample report can be viewed here: https://drive.google.com/file/d/1msP4mBYTxAozQgpsVgK0DJkvuhRGOIfA/view?usp=sharing
Implementation Plan for New smallcases:
Starting 24th January ‘25, any new smallcases which are published will also have a model portfolio report/portfolio report with all details
Subscribers to these new smallcases will be able to access the model portfolio report from 31st January ‘25. The subscribers can access the report in the subscription confirmation email notification, as well as on smallcase app and website
Any rebalances pushed for these smallcases will generate an updated report - the users will get access to the report in the rebalance email notification, in addition to on smallcase app and website
The report will be a password protected PDF and password details will be shared to users in both email as well as on the app and website. This is to prevent any unauthorised access to the report
Implementation Plan for Existing smallcases:
Starting 24th January ‘25, any new rebalances pushed for existing smallcases will generate a report will all updated details
Subscribers will get access to the report from 31st January ‘25 once they have subscribed to the smallcase. The subscribers can access the report in the rebalance email notification, subscription confirmation/renewal email notification, as well as on the smallcase app and website
The report will be a password protected PDF and password details will be shared to users in both email as well as on the app and website. This is to prevent any unauthorised access to the report
Additional Points:
All rebalances before 24th January will continue to function as is
We strongly advise to push a rebalance before 30th June 2025, since the model portfolio report/portfolio report for existing smallcases will only be generated upon a rebalance
In case you wish to continue with the same portfolio composition, you can simply add a “Skip Rebalance”. This will also generate the report and portfolio composition will remain the same
Changes to Rebalance flows
The model portfolio report/portfolio report will now contain constituent-wise rationale for all constituents part of the smallcase.
ℹ️ NOTE: A separate announcement will be made to notify once the rationale addition implementation is added to rebalance flows on the platform. You can save the rebalances and add them to Rebalances -> Added section to ensure you can push them as soon as possible post 31 January.
Given below are instructions on how to add rationales while rebalancing:
STEP 1: Click on Add rebalance
To add rebalance for any smallcase, go to Rebalances -> Upcoming -> “Add Rebalance” or go to My smallcases -> Manage -> Rebalance -> “Add Rebalance”
STEP 2: Add rationale for individual constituents
On the rebalance screen, a new column in the updated composition table will be present. Against each constituent, an option called “Add” will be present in the column.
By clicking on the same, a window will appear where the constituent rationale can be added. Per constituent, 2 images can also be added to support the rationale, if required.
Once the rationale and images have been added, click on “Save changes” to save the constituent rationale.
For all constituents where rationale has been added, the column will show an option to “View/Edit”. This can be used to view the existing rationale as well as update the same if required.
STEP 3: Click on “Add rebalance” or “Skip rebalance”
In case you want to continue with the current composition as is, you can simply add just the rationales for the current composition and click on “Skip rebalance” towards the right. This will ensure that the model portfolio report will now have all constituent rationales
In case you have updated the composition, then click on “Add rebalance”. The rebalance flow remains the same post this
STEP 4: Preview the Model Portfolio Report/Portfolio Report
Once a rebalance has been added, you can now preview the report by clicking on the “Preview Report” option present in Rebalances -> Added
In case you wish to make any changes to the rebalance, you can edit the rebalance update by clicking on the 3 dots icon towards the right of the rebalance
ℹ️ NOTE:
The preview is merely a support tool to showcase how the model portfolio report will look post rebalance. Calculated values such as returns, CAGR, volatility etc. present in the report will be updated once the rebalance has been pushed
STEP 5: See reports against each rebalance
Once a rebalance is pushed, or initially at the point of publishing of a smallcase, the report for the same can be viewed from Rebalances -> Pushed
To view the reports for any smallcase, expand the smallcase details from this window. A column providing all reports against each rebalance will be available
Adding rationales for new smallcases
In case any new smallcases are being created, the rationales can be added in STEP 2, as shown below. The flow for adding rationales is the same as covered above.
While it is not mandatory to add rationales to save the smallcase as draft, it will be mandatory for RAs to have added the rationales in case the smallcase is being published.
Once a smallcase is saved as draft and all necessary details have been added, the model portfolio/portfolio report can be previewed. To preview the report, simply click on the “Preview Research Report” option from My smallcases -> Draft -> Click on the 3 dots icon at the right -> Preview Research Report
