As you would recall, I had launched this new smallcase Mi-NNF10 ( Momentum Investing on Nifty next 50 index with a 10 stock portfolio) built around the concept of finding momentum within the Nifty Next 50 universe and having a semi-passive approach to a monthly rebalance just a few weeks back at Diwali.
Here was the launch piece
I am thrilled to release its first monthly report with more than a few hundred users who have joined us in this short time.
November 2020 was clearly a fantastic month for the bulls. Nifty 50 crossed its all-time highs of 12430 of January 2020 and now even hovering around 13000. MI_NNF10 enjoyed the bullish sentiment of the month and is up +10.08% returns in the last one month.
As you can see in the chart above, the strategy NNF10 has crossed its past peak and is riding up at index value of 485.12 ( 100 in Mar11) vs Nifty at 243 and Nifty Next 50 index at 290. The Nifty Next 50 (Red) is yet to cross its 2018 peak so far.
Long Term Performance
The CAGR clocked on the strategy is a very healthy 17.57% vs 11.53% and 9.53% in the respective indices thus proving that the momentum factor is successfully isolated by the strategy over long periods of time.
In the calendar year 2020 also the NNF10 has performed well vs the respective benchmarks and continues to enjoy better returns with lower drawdowns. MI_NNF10 has clocked 11.55% in comparison to Nifty Next’s 7.13% and Nifty ’50s 6.54% returns in 2020
Monthly Performance Comparison
Monthly returns are clearly showing MI_NNF10 has better resilience in drawdowns during bad months. However, MI_NNF10 has underperformed other indices in November 2020 by a slight margin
Top Gainer ADANI GREENS +32.71%
Top Losers MUTHOOTFIN -6.34%
The current sectoral composition looks like this below. The Energy and the IT sectors gained while BFSI gave up some ground.
For the December Series, there are no entry/exits in the portfolio.
Each constituent is rebalanced to 10% weight at the end of each month thus booking part profits on out performance and increasing weight on underperformers if they still satisfy the inclusion conditions.
With the NNF index breaking out of its long consolidation, the road to the future looks bright. The strategy along with the markets will have its hiccups on the way but if the results of the last decade are of any significance, then there is a good probability of an outperformance in the coming one too!
Long term index /passive investors will do well in gradually building up an exposure to this strategy with an intent of having a low cost outperforming strategy executed right in their own account which will give diversification to their existing smallcase and direct stock investments. The strategy can be started for as little as INR 50,000 and can be gradually built up using SIPs or periodic lumpsums.
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The strategy is run by Weekendinvesting.com through the Smallcase.com platform. This report has special inputs by Sumit Kumar Behal, my research partner.
This blog was updated on 1.12.2020 due to some erroneous (lower) performance numbers reported before