- Wealth PMS (50L+)
April 2021 Monthly Update for the Capitalmind Momentum Portfolio
A flat to mildly negative month for index heavyweights but a lot of activity in specific segments especially metals, chemicals, and a few others. 2 of 5 stocks were positive for the month but the shift away from mega-caps to the mid and smaller caps was noticeable through the course of the month. Capitalmind Momentum had another strong month with a +9.6% gain. Read on for the April 2021 summary.
Chart shows performance (annualized returns, annualized volatility, and maximum drawdown from peak) stince inception in January 2019.
Reading this chart: Returns, higher the better (obviously), Volatility: lower the better, and Maximum Drawdown: measured as falls from previous peak, lesser the better, i.e. the smallest negative value, the best possible value is 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.
Chart shows Capitalmind Momentum Model Portfolio returns versus the NIFTY 50 and the CNX 500. Dividends have not been considered.
In March 2021, the breadth of stocks showing positive momentum reduced while some sectors showed definite strength indicating mixed signals. In April, the CNX500 ending marginally positive even as the big stocks of the NIFTY 50 ended down, implying mid and small caps had a strong month even as the mega caps struggled.
Chart below shows sector-wise view of the CNX 500 over the last 1 month, 6 months, and 1 year. Note, except the CNX 500, the returns are median and not market-cap weighted returns.
288 stocks out of the 500 in the CNX500 were negative for the month, compared to 302 stocks the month before.
During the course of April, we exit two stocks, reduced allocation to one stock, and added four stocks. This was accompanied with reducing the allocation to cash we had added at the end of March.
Entering May, we replace three stocks and deploy the remaining cash to add 4 stocks to the portfolio.
Current Portfolio: Chart shows current positions with exits and fresh entries. Stock numbers indicate the order in which they were added to the portfolio. The May additions are denoted as “Entry”. The dark green dots show % return since entry into the portfolio (vertical line at zero).
We were 15% in cash at the start of April which progressively reduced to 5%. In spite of not being fully deployed, we saw significant outperformance for the month. Going into May, we see overall strength and are deploying the remaining cash and replacing larger-cap stocks with some mid-caps. This is not by design but what the momentum rules are telling us.
All this while the second wave of the pandemic has reached inside our privileged bubbles and turned lives upside down with indifference. You would think a raging health crisis of this scale would show some effects in markets but that’s just now how things have worked in the past.
If you have been part of the lucky few to have suffered no more than inconvenience over the last couple of months, please consider donating to organizations trying hard to help people cope.
Frequently asked questions about the Capitalmind Momentum Portfolio
Other CM Portfolios: CM Focused and CM Passive make new lifetime highs in April [Premium Access Only]