Zerodha, a leading brokerage firm in India, has launched a new feature called the 'Portfolio Performance Curve' on its Console platform, allowing traders to track the performance of their portfolios more effectively. This development, announced by Zerodha's co-founder and CEO Nithin Kamath, is set to provide traders with unparalleled insights into their trading activities. Kamath stated, "Zerodha is ‘probably the only broker to offer this feature in India and possibly worldwide.’" This feature is intended to help users visualise account performance and compare it against the Nifty 50 index, enhancing the decision-making process for investors. The 'Portfolio Performance Curve' emulated the Net Asset Value (NAV) calculation used in mutual funds, offering a detailed representation of a trader's account performance. According to Kamath, "The performance curve is calculated in a similar way to the NAV of mutual funds. The daily NAV is calculated using the P&L of all trades across equity intraday and delivery, F&O, commodities, MTF, and mutual funds based on the cash in the account." By using this method, traders can view their returns in a comprehensive manner, factoring in investments, trades, and cash flows. This feature marks the first instance of such a tool being made available to Indian traders. A notable aspect of this launch is the ability of the Portfolio Performance Curve to adjust for cash inflows and outflows, which ensures that the performance analysis reflects only the actual investment returns. Zerodha aims to provide traders with a clearer understanding of their performance, allowing for more informed investment strategies. This initiative aligns with the company’s objective to enable traders to benchmark their performance against prevalent market indices such as the Nifty 50. Kamath acknowledged the delay in releasing this feature, noting, "It was on our list of things to do for a long time, but there were way too many moving pieces, and it got delayed." The Portfolio Performance Curve begins with a base NAV of Rs 1,000, effective from July 1, 2022, or from when an account first reaches a balance of Rs 1,000. This base establishes a starting point for performance tracking. As funds are added or withdrawn from the account, the NAV adjusts accordingly, ensuring that traders can evaluate only their real trading performance. This meticulous approach helps traders distinguish between genuine investment growth and mere cash flow fluctuations, offering a clearer picture of their trading success. Zerodha's initiative stands out in the brokerage market, as it innovatively integrates advanced performance tracking tools into its platform. This move could potentially place Zerodha ahead of competitors who may not yet offer such detailed performance analysis features. As traders increasingly seek strategies to optimise their investments, tools like the Portfolio Performance Curve could become integral to modern trading practices. By providing a comprehensive overview of trading activities, Zerodha is likely to enhance its appeal among active traders looking for advanced analytical capabilities.
