Jan 2021 Monthly Update for the Capitalmind Momentum Portfolio
Jan 2021 Returns Update
Chart shows Capitalmind Momentum Model Portfolio returns versus the NIFTY 50 and the CNX 500. Dividends have not been considered.
Markets retraced a bit in January after a hectic last couple of months in 2020. Momentum did a little better ending up for the month. It has trailed the markets over the last three months, but has outperformed over the last 6 and 12 months.
Performance since inception
Chart shows performance (annualised returns, annualised volatility and maximum drawdown from peak) since inception in January 2019.
Reading this chart: Returns, higher the better (obviously), Volatility: lower the better, and Maximum Drawdown: higher the better, i.e. the smallest negative value, the best possible value being zero.
The Momentum portfolio tries to outperform the NIFTY while suffering lower drawdowns in corrections. The smallcase version of the portfolio has been live since Jan 2019 and has comfortably outpaced the benchmarks with lower volatility.
Summary of Jan 2021
We closed out 7 positions through the month.
- We exit 5 positions at a loss, the worst being ADVENZYMES at -8%
- The other 2 positions delivered nominal gains with DIVISLAB at +3.7%
Chart below shows these positions on holding period (x-axis) versus returns realised (y-axis). The size of the bubble depicts the relative realised return in ₹ terms. Red bubbles were realised losses. Also note these also include positions reduced to bring their weights to within portfolio rules.
Open Positions
Chart shows current open positions. Stock numbers indicate the order in which they were added to the portfolio. The February additions are positions 16 to 18.
Outlook for February
We said in our last fact sheet about January being a subdued month historically, and sure enough, the NIFTY was down 2.5%.
But markets these days seem anything but subdued. Moves, up or down seem to be with aggressive intent. The budget is now done and markets have rejoiced, more because it did not contain any nasty surprises for tax payers and investors, and also a few good things.
Here’s our popular budget thread in case you didn’t get a chance to follow along:
The Big Massive Thread on #Budget2021 – our take at @capitalmind_in pic.twitter.com/KmmDvFtFtW
— Deepak Shenoy (@deepakshenoy) February 1, 2021
More detailed takes on the budget coming soon right here.
January saw a consistent market-wide decline in stocks showing momentum as the month progressed. Maybe it was budget uncertainty weighing on the markets, which now can breathe easy. But the unexpected is almost the norm now, as shown by the $GME Short squeeze and Melvin Capital’s resulting loss of half its value. So we’ll use that classic noncommittal phrase of being “cautiously optimistic” about the next few weeks.
Other Capitalmind Portfolio Jan 2021 Factsheets:
CM Longterm Multicap Jan 2021 Factsheet [Premium Access]
Past Momentum Factsheets:
Or read our 2020 wrap-up post about how all our portfolios did
