Smallcase Mi_ST_CNX500

Mi_ST_CNX500, as the name suggests, is a Momentum Investing portfolio for capturing Short Term trends with its constituents chosen from the CNX500 universe only.

An up-to 20 stock portfolio with equal weights for each component has been selected  from the CNX500 universe (which is made up of the largest 500 companies based on market capitalization and includes large caps, mid caps and some bigger small caps) based on their Momentum ranking. Momentum ranking is basically a ranking of relative out-performance of each stock with respect to its peer group over the last many periods. Every week the portfolio is reviewed and stocks which do not hold up the momentum ranks are shelved while new ones enter. At times when new momentum picks are not available the portfolio will sit in cash (in interest bearing instruments like LIQUIDBEES).

The single biggest advantage of these momentum strategies is that the portfolios are never allowed to bleed endlessly in loss and the winner are allowed to run to their maximum potential. The mathematical advantage of having big winners and smaller losers ultimately is able to bring home the desired portfolio gains.

The results of this strategy from Apr 2016 to Nov 2018 are presented here:

results01042016to07122018

The strategy generated 241 trades in this period and the winner: loser ratio was 46:54. Each winner however was up on average +20% while each loser was down -8%. The portfolio max drawdown recorded was -30%. The average holding period for any investment was about 12 weeks.

This is an entirely non discretionary strategy which means that there is no weight-age to any opinion , forecast or fundamental bias towards the stock selection or deletion and the strategy is run as per well tested mechanical rules. An advisory update is issued every weekend and the changes required in the portfolio (if any) are communicated via email to the user at 9:30 AM the following Monday morning to be executed by a single click by the user.

Smallcase is a platform that we have chosen to use to help execute this strategy in a seamless manner.   This service is currently available for Zerodha, AxisDirect, HDFCSec and Edelweiss brokerage users only. You can read more about the  Step- wise investing process for this strategy.

Weekendinvesting.smallcase.com strategy page links are here
Mi_LT_CNX200
Mi_MT_Allcap
Mi_ST_CNX500