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ARQ

WHAT IS ARQ SCORE

ARQ Score is an indicative score for checking the credibility and trustworthiness of a particular stock.

WHAT GOES INTO "ARQ SCORE" CALCULATION?

ARQ Score rates a stock by analysing multiple factors such as...

Fundamental
Strength

Corporate
Governance

Market Cap

Return Ratios

Total Asset Base

Valuation

It uses deep industry insights, complex machine machine learning and artificial intelligence which takes into account billions of combinations and processes terabytes of data points, thus eliminating human error and emotional bias.

HOW DOES ARQ SCORE HELP YOU?

ARQ Score helps you invest in the good stocks by identifying and avoiding the probable bad stocks. You don't need to do research on the fundamentals of a company manually, but simply check its ARQ Score.

ARQ Score makes your stock selection...

More Accurate

Faster

Simpler

 
High ARQ Score
  • Consistent and Strong Fundamentals
  • Strong Corporate Governance
  • Financially Strong
  • Good Return Ratios
  • Large Total Asset Base
  • Large Market Cap
Low ARQ Score
  • Weak Fundamentals
  • Bad Corporate Governance
  • Financial Shenanigans
  • Bad Return Ratios
  • Account Manipulation
  • Small/Micro Cap
As a general rule, a stock with ARQ Score below 50/100 should be avoided in favour of a stock with ARQ score above 80/100

WHY TRUST THE ARQ SCORE OF A STOCK?

ARQ is a rule-based investment engine which applies artificial intelligence to create predictive investment recommendations supported by machine learning, cutting-edge cognitive technology, and deep industry insight. ARQ provides customised investment advisory services across asset classes such as equity, debt and gold, upon examining the clients' risk appetite and advising them on asset allocation by leveraging the Modern Portfolio Theory, to recommend investments specific to each client.
Results consider all transaction charges and taxes. Extensive back-testing proves strong average results for anyone investing in ARQ recommendations, whenever they would have started. It works for anytime over that period, not just from one arbitrary point to another point.

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WHY CHOOSE ARQ ?

 

ARQ

  • Powered by machine learning & deep industry insights
  • Advice based on future potential
  • No emotional bias
  • Tested by cutting-edge advanced technology
  • Auto- notification to re-balance portfolio
  • Back-tests prove ARQ outperforms benchmarks
  • Offers personalised advice at zero cost
 

OTHERS

  • Limited views of individual fund managers
  • Advice based on past performance
  • Risk of emotional bias
  • Tested by age-old standard technology
  • No follow-up advice
  • No such supporting data is available
  • Charges hefty fees for personalised advice

FREQUENTLY ASKED QUESTIONS

How does ARQ help me?

ARQ is a rule-based investment engine that takes emotional bias out of investing, and lets you harness the maximum performance of equities as an asset class.

What makes ARQ powerful?

ARQ is empowered by advanced technology:

Expert Insights

Machine Learning

Cognitive Algorithms

Teraflops of processing power

Can I check ARQ's performance claims?

Don’t just take our word for it

Our goal with ARQ from the inception was to challenge, evaluate and scientifically back-test every piece of investment wisdom & logic. ARQ’s performance test results are available for you to examine, before you take the plunge with your hard-earned money.

What are the types of investments for which ARQ offers recommendations?

ARQ offers recommendations for Mutual Funds (Lumpsum & SIP) and Equity Stocks.

Where can I find ARQ?

All Angel Broking customers can access & use ARQ through https://trade.angelbroking.com or the Angel Broking App.

How does ARQ make me, my own fund manager?

Once you start using ARQ, it provides recommendations on a periodic basis through notifications sent via SMS. So, all you need to do is execute trades as per ARQ’s recommendations & thus become your own fund manager.

Can I invest using ARQ if I am not an Angel Broking customer?

No, you cannot. ARQ is available exclusively for Angel Broking customers. To use ARQ, you have to open a Demat Account with Angel Broking (which takes about 1 Hour if you have your documents ready). Once your Angel Broking Demat Account is active you can access & use ARQ on the same day.

If I seek ARQ's recommendation, is it mandatory for me to follow that?

ARQ is an advisory product & not a PMS product. There is no enrollment fee or minimum committed investment. Once you receive the recommendations, if you wish to you can go ahead with the recommendations or decide not to.

What is the strategy used by ARQ?

ARQ Advisory is based on a model whose performance has been optimized to provide recommendations with high outperformance and strike rates. The model has been tested using scientific back-testing and has also been validated based on its track record. The model has been calibrated to take advantage of the upticks in the stocks or mutual funds during an investment period.

How does ARQ Mutual Funds advice help me to earn more?

ARQ helps you pick & invest in the right Mutual Funds. Picking the top performing Mutual Funds is not easy. General strategies to invest in MF like, investing based on past performance, brand name, large size or holding the same scheme for years have been proven to be non-effective ARQ recommends Mutual Fund schemes based on future performance potential & not past performance track record. Hence with ARQ’s advice, you have the best shot at picking the right schemes and getting the highest returns from your Mutual Fund investments.

What is the downside of buying Mutual Funds without ARQ?

Without ARQ’s advice you might end up buying under-performing MF schemes as the traditional methods of MF selection have proven to be inadequate:

  • In last 5 years, Top 10 MF schemes gave 14% returns while Bottom 10 schemes gave 5.1% returns.
  • Size didn’t matter. The 5 largest schemes in 2013 were not even in the Top 50 performance charts over the next 3 years.
  • Past performance did not equal future performance. Top 5 schemes between 2006-11 were nowhere near the top between 2011-16. In fact they lagged behind the 2011-16 top performers by more than 30%.
  • Holding the same scheme for years at a time was not the ideal strategy. Over the last 4 years, only one scheme held onto its Top 3 position for 2 consecutive years, while ten other schemes featured in the Top 3 only once in the last 4 years.

What category of mutual funds does ARQ offer recommendations for?

ARQ offers recommendations for mutual funds across various categories such as Largecap, Midcap, Smallcap, Multicap & ELSS funds.

What is the structure of ARQ Advisory for Mutual Funds?

As soon as you access ARQ for Mutual Fund recommendations, ARQ will show you the Top 2 schemes for SIP/Lumpsum. You have to invest equally in the preferred schemes. You will receive annual notifications through SMS about rebalancing your portfolio. All you have to do is execute the transaction as per ARQ’s recommendation.

What is the minimum holding period for ARQ recommended Mutual Funds?

ARQ’s investment strategy for Mutual Funds is designed to work best in a 1 year time frame. You must hold your Mutual Fund schemes for 1 year. After 1 year, you will receive a notification intimating the list of Top 2 Mutual Fund schemes. If some or all of the schemes differ from the ones you are currently holding, then you must sell your existing holdings and buy the newly recommended mutual funds.

Can I choose which of the 2 schemes to buy?

ARQ’s strategy has been optimized to give the best performance over a 1 year period. Moreover, a 1 year holding period ensures that you don’t have to pay exit load & capital gains tax.

Why does ARQ's strategy have to be followed ideally for at least 12 months?

No, you cannot. ARQ is available exclusively for Angel Broking customers.

ARQ’s strategy has been optimized to give the best performance over a 1 year period. Moreover, a 1 year holding period ensures that you don’t have to pay exit load & capital gains tax.

What is the performance of ARQ recommendations?

Large & Multi Cap:

In the past six years (2009-2016), over any 12-month period, on an average ARQ’s mutual fund strategy has delivered 21% annual returns, beating the Sensex by 8.4%. Harnessing the true compounding power of mutual funds, between Jan 2009 to Jan 2016, Rs 1 lakh invested in ARQ’s MF strategy would have become Rs 3.5 lakhs as against Rs 2.6 lakhs if invested in the Sensex over the same period.

Mid & Small Cap:

In the past six years, over any 12-month period, on an average ARQ’s mutual fund strategy has delivered 31% annual returns, beating the Sensex by 11%.

Harnessing the true compounding power of mutual funds, between Jan 2009 to Jan 2016, Rs 1 lakh invested in ARQ’s MF strategy would have become Rs 5.8 lakhs as against Rs 3.7 lakhs if invested in the Nifty 100 over the same period.

These performances are not just from one point of time to another, but the average performance irrespective of whichever month you would have started applying this strategy.

What is the strike rate of ARQ Mutual Fund Advisory?

Large & Multi Cap: In the past six years, over any 12-month period, ARQ MF recommendations beat the Sensex 80% of the time.

Mid & Small Cap: In the past six years, over any 12-month period, ARQ MF recommendations beat the Nifty 100 93% of the time.

What are the characteristics of the ARQ Equity strategies?

All strategies are optimized to give the best returns over a 1 year period.

Let’s look at an indicative strategy:

Holding Period: The current strategy has a 1 month holding period after which you will be notified whether to retain the stocks or switch to a new set of stocks.

Market Cap: Large-Cap

No. of Stocks recommended: 3

Over a period of time there will be several strategies which may have different holding periods, market capitalization and no. of stocks recommended.

Going forward in this FAQ section the questions are answered in reference to the above strategy.

What is the structure of ARQ Advisory - for Equity stocks?

When you access ARQ Stock Advisory, you will receive recommendations to ‘Buy Top 3 Stocks’ by SMS notification. These 3 stocks are selected from a universe of high quality fundamental stocks. These stock recommendations are updated daily, so you must make sure to buy the 3 stocks which are recommended as the top buys on the day you choose to invest.

What is the holding period of the stock recommendations? Do I have to buy all the stocks recommended?

ARQ is a disciplined stock investment strategy. You must buy all 3 stocks in approximately an equal amount. The holding period is 1 month. After 1 month, you will receive a notification intimating of the list of Top 3 stocks on that day. If some or all of the stocks differ from the ones you are currently holding, then you must sell your existing holdings and buy the newly recommended stocks.

E.g.

1st June 2016 Recommendations: Buy Piramal Enterprises, JSW Steel, Bajaj Finance.

1st July 2016 Recommendations: Buy Piramal Enterprises, JSW Steel, Pidilite.

Why does ARQ's strategy have to be followed ideally for at least 12 months?

ARQ is a disciplined stock investment strategy. Unlike other advisory products, ARQ’s stock advice works at a portfolio level, designed to keep you invested 365 days a year in the Top 3 best quality stocks. ARQ’s strategy has been optimized to give the best performance over a 1 year period. Due to the volatile nature of stocks, daily/weekly/monthly returns can tend to fluctuate, so the ideal recommended investment duration is 12 months.

Can I choose which of the 3 stocks to buy?

The strategy involves disciplined investing. You must invest in all 3 stocks equally.

You must sell within a month and buy the next set of 3 stocks.

Will I have to change the stocks every month?

New set of stocks will be recommended every month. They may or may not be same as last month. For the next month those are the stocks that are expected to give maximum returns, so irrespective of the returns generated in the previous month, you should not hold on to the previous month stocks if the list of stocks has changed this month.

How do I buy exactly the same amount in each of the 3 stocks?

ARQ is optimized to provide the best returns over a 12 month period. Hence, there is no individual target price or target returns from each stock, but rather you should follow the strategy for 12 consecutive months to get optimum returns at the portfolio level.

What is the expected return on the invested stocks?

For the 3 Stock Large-cap strategy: In the past six years, over any 12-month period, on an average ARQ’s stock strategy has delivered 49% annual returns, beating the Sensex by 34%. And that’s after considering transactions costs.

This performance is not just from one point of time to another, but the average performance irrespective of whichever month you would have started applying this strategy. Harnessing the true compounding power of equities, between Jan 2009 to Jan 2016, Rs 1 lakh invested in ARQ’s stock strategy would have become Rs13.6 lakhs as against Rs2.6lakhs if invested in the Sensex over the same period.

What is the performance of this strategy?

For the 3 Stock Large-cap strategy: ARQ stock recommendations beat the Sensex 92% of the time in the past six years, provided the strategy was continued for 12 consecutive months. The strike rate for a 1 month period without any reinvestment is 62% after factoring in charges. This means that ARQ stock recommendations beat the Sensex 62% of the time in the past six years, if invested for only 1 month.

What is the strike rate of ARQ Equity Advisory?

The reason for the better strike rate over 12 months is 2-fold:

Firstly, the number of months that the recommendations under-perform are lesser than the outperforming months. Secondly, and more importantly, in the months when ARQ recommendations underperform, the quantum of underperformance is much lesser than the quantum of outperformance in the positive months i.e. the risk-reward ratio is favorable. By keeping you invested 365 days a year, it helps you capture the significant up-moves in several stocks so that eventually you end up on top by a healthy margin, as demonstrated by the validated results.

Why is ARQ's strike rate so high?

The returns are calculated after taking into account the brokerage charges (we’ve taken 3.5% for 12 churns, implying 24 Buy/Sell transactions i.e. around 15paisa per transaction). Plus, STT has been taken, Service Tax is taken, so basically the returns arrived at are after all charges.

Note: Short Term Capital Gains Tax not considered, just as banks also do not quote interest rate post tax, nor do we give Target price and target upside in any Fundamental/Technical, etc. net of tax. But, for reference the investor can keep in mind 15% short-term capital gains tax, which means that returns would be lower by around 6.5% in the 6-year testing period.

How have you arrived at the numbers indicating the strategy beats the Sensex by more than 30%? Does it include the brokerage I'll have to pay?

Buy the closest round number of shares of each stock so that the total amount invested is divided approximately equally. E.g. If you are investing Rs 75,000, you should buy around Rs 25,000 in each stock, as below:

Amount to be invested Stock Price No. of shares that can be bought Amount invested in each stock
A 25,000 530 47 24,910
B 25,000 62 403 24,986
C 25,000 1,230 20 24,600
74,496

How does ARQ calculate the score of my portfolio?

ARQ Score is an invaluable tool to help you assess the quality of your portfolio based on strong fundamental and statistical parameters. It can help alert you to any poor quality investments in your portfolio and take corrective action.

Which asset classes are covered by ARQ while calculating my portfolio in score?

ARQ provides the scores for more than 4000 stocks listed on the Indian markets, as well as all diversified equity mutual fund schemes and debt mutual fund schemes.

How accurate is this score?

ARQ Score is an invaluable tool to help you assess the quality of your portfolio based on strong fundamental and statistical parameters. It can help alert you to any poor quality investments in your portfolio and take corrective action.

For how long are these scores valid?

Scores are dynamic to take into account the ever-evolving market conditions. That said, the scores give you a good indication of the fundamental quality of the investment and hence can be used to assess your ARQ score from a medium-term one to two year horizon.

How often should I check the score?

We provide a weekly assessment through mailer to all Angel Broking clients.

How does ARQ help in improving my portfolio score?

Not only does ARQ alert you to any weaker holdings in your portfolio but also gives a fast and convenient single click system to’Improve your score’. Click on ‘Improve your score’ button and you will be suggested the holdings in your portfolio that you should consider selling. It will also tell you to invest the money from the sale into better quality stocks and mutual funds picked by ARQ’s award-winning, market-beating models.

Is there a minimum or maximum cap on investing?

When buying ARQ recommendations, the minimum investment amount is Rs. 10000/- for mutual funds and Rs. 25000/- for stocks.

How much does this portfolio score service cost?

This service is FREE, unlike other wealth management companies that offer this only to the wealthiest few.

Can I check the score of my portfolio if I am not an Angel Broking customer?

Yes, you can check the score of your current holdings by simply visiting /portfolio-health-score or you can also download the Angel Broking app.

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