Update: I have exited Minance in December 2018. This review is genuine and was valid in the context till Dec18 but I am unsure of their returns and current status!
Minance is a new concept to this world of startups. Pretty innovative concept. In short, Customers open their accounts with them and put money. Minance does the trade and make the money grow for you taking only 20% profit when you withdraw your profits.
The minimum investment increased from 25,000 INR to 1 Lakh this year after the demonetization. It is the optimal amount to hedge the positions properly since span margins are higher. Majority of their investors are already above this limit; so it was a swift transition.
But if you’ve other plans like systematic investment rather than upfront lump sum, it is better to get in touch with them directly. Every investors have different appetite so every portfolio is tailor made.
At no point of time, does a Minance Partner transfer any investment capital to a Minance group entity. Your investment account is held with our broking partner, Angel Broking. All equity stocks are held in your demat account. All un-utilized funds are held in a trading account owned and controlled by you, who’s status you can check on a real time basis.
Tip: Start with 2.5 – 3.5 Lakh cause once I asked them to recommend me their best quant. 2.5 -3.5 Lakh is best for them to implement their strategies.
Depending on the risk profile Minance provides 5% capital protection against the capital. They have a very robust, but also very expensive risk management strategy which does it.
Till far as I have analysed there is no risk towards capital. Their trades are long so you might get tiny heart attack if there is negative value but don’t panic it will be green profit when the position is closed as well as if it went ‘that bad’ they will hedge and make more money.
I’ll say thanks to Mr. Anurag for their transparency on allowing to share some of the returns publicly. This is the first time in the internet I convinced them to permit me the results live.
All the results/metrics are different for each profile. Portfolios for each Partner is designed as per risk profile and investment capital. At any point of time, there can be more than 40 different types of portfolio allocations.
Case Study 1 : Amit Kumar Ghosh
|Invested Principal||1,00,000 INR|
|Net Profit/Loss||20,986.25 INR|
|% Net Profit/Loss||+ 20.99%|
|Capital Protection Threshold||30%|
Case Study 2 : Apurba Ghosh
That’s my account too. I have diversified my investments to multiple family members to avail tax benefits. You should do it too.
|Invested Principal||2,20,000 INR|
|Net Profit/Loss||9,084 INR|
|% Net Profit/Loss||+ 4.13%|
|Capital Protection Threshold||10%|
Then I opted for removing my capital protection at all. I had gone hard process convincing them to remove this. But don’t do it! It is not recommended unless you’re a trader. Otherwise though you will be happy seeing profits, you will have chest burns in bad day.
Minance has 5 risk profiles. Risk Profile 1 is the lowest risk and Risk Profile 2 is the highest. To review Minance properly, I needed various risk profiles to study. Thanks to our flock channel. There are tons of Minance Investors.
However I got the data for Minance Investors in the period of May 1, 2016 to October 31, 2016.
|Profile||Invested Principal||Net Profit/Loss||% Net Profit/Loss||Risk Profile|
Do you want to see all trade details? Yes, that’s available too!
AUM Growth and Partner Strength:
However this numbers have been never shared in online before.
- Minance has approximate 1,400 Minance Partners.
- Minance’s net exposure is 130 Cr.
- The number of partners are growing 16% per month.
- Last six months AUM increase by 250%.
Minance charges 20% performance fee. It’s non negotiable for individual investors. But institutional investors have different rules as their needs are different and diversified. To be noted, they will charge 516 INR per year from the second year as account maintenance charge.
However, if you’re employed by the Indian Armed Forces, Coast Guards or Border Security Force, the performance fee is reduced to 10%.
So 20% on profits only!
Minimum Holding Period: No bindings but it is recommended to keep 7–8 months.
Why Not Zerodha:
Zerodha does not have a sub-brokerage friendly business model. They do have have a referral program which is basically to incentivise existing customers to refer their friends and share some brokerage.
Angel Broking, on the other hand, has grown their entire business via the sub-broker model. The hardware and software infrastructure they provide their sub-brokers with is stunning and robust. Right from terminal access via API integration to NEST Plus and ODIN, eKYC for all client accounts, risk management software, back office operations applications, etc to compliance related issues and logistical support.
Minance has already applied for a broker’s licence (trading member + alpha member) with SEBI. It is estimated that it’ll take them a year more to get the license.
Pros and Cons:
On an investment horizon of greater than 1 year, no Minance Partner has redeemed an amount lesser than their principal investment.
- Capital Protection. First in the industry! Risking your money in investing in stock market is now very minimal.
- They have a team of tax consultants to help all Minance Partners with their filing when tax time comes.
- Minance gets no money till they make profit. Period.
- No management fee.
- Yearly fee of 516 INR from the second year as account maintenance charge.
- Minance is low on head count. I’ve heard of few negative reviews on slow response. However, my RM Adhiraj can be pinged midnight.
The highest drawdown faced by any one Partner has been 34%. This happened in September 2015. He/she did not redeem any funds. The portfolio has increased by 41% since then.
While most hedge funds are set up only for the ultra-rich, Minance is for everyone. Drop your email and we'll get back to you with all our details.
There has been some doubts I’ve received from the readers. I got those queries clarified from Mr. Anurag.
Q: Does Minance tells their investors what analysis they have carried out on the investments they have made using investor’s money?
A: We absolutely do. Every Minance Partner has a dedicated investment manager (IM). If at any point you want to know our thinking behind a particular investment or a portfolio construction, just drop your IM a call or a text and he or she will be glad to help you. Going forward, we plan to send you a link to an article or blog post explaining our investment strategy along with the trade confirmation SMS.
Q: Minance provides capital protection on principal amount only. Does that mean if we get good profits it may be wiped out with no protection?
A: You can convert your profits to your principal amount. You need to redeem the amount and put that amount back to the account. You’re protected with capital protection now.
Q: What is the outlook of Minance for the year 2017?
A: To be honest, I see a lot of risk and volatility because of the Budget, GST rollout mechanism, Interest rate and inflation environment post demonetisation. I think that 2017 is the year we accumulate large caps for our equity portfolios and focus on theta decay strategies or vega neutral strategies for derivative portfolios but it will depend on the risk profile.
Q: How come you’re so successful than your peers?
A: Successful? Not really. We’re just getting started.
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