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CM Strategy

Trend our friend, is back in May

chase-bannder.jpg

May 2021 monthly update for the Capitalmind Chase Portfolio


May was an interesting month in the sense, though the futures component ended flat, the index (passive component) of Chase almost compensated for it.

While for the first half of the month index went chopping around, the second half saw a trend emerge and make an All time high (ATH). The trend this time around was led by the mid and small caps, which is quite evident both in terms of momentum performance and the chart below.

 

Trend our friend, is back in May

We also observed a divergence of sorts between the US markets and the NIFTY50 index for the first few weeks of May, which may have been due to the Covid situation specifically in India, however we are pretty much aligned now.

Some data about how we’ve been doing

Trend our friend, is back in May

Most of the gains in the month of May came from the passive component, the active component was almost flat.

Trend our friend, is back in May

Drawdown & recovery

In the previous update we spoke about drawdowns, and for the time being the 24% drawdown on Chase has held up, meaning we didn’t breach that. As of now the recovery has been largely led by the passive component of the index, with a minor contribution from the active component. We are now at an 18% drawdown from the peak.

Trend our friend, is back in May

How are we doing on the Options model?

We started with the Options model from 20th of April, as of 9th of June, the Options model had captured 345 points vs. 462 in the futures model. That’s close to 74% of futures. It’s is too early to comment on it though.

What else?

Well, at the risk of sounding repetitive, if for some reason you are trading Chase without investing in the passive component, please avoid doing that. The only reason the drawdowns in Chase are lesser compared to futures only / options only models, is low leverage.

If you are new to derivatives or futures as such, feel free to ask us any questions that you may have in the #beginners channel and we will be happy to answer those for you.

That’s pretty much for May’21.

Other CM Strategies:

The May when everything seemed possible: CM Focused and CM Passive Performance Roundup

What sell in May and go away?


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