June 2022 portfolio update
For the broader markets, June turned out to be the worst month in 2022 so far. The median stock was down almost 6%, and the NIFTY TRI was down 4.7% the third consecutive monthly decline. Of the NSE-listed stock universe, three stocks declined for every stock that rose in June. CM Momentum did relatively better and was down 2% in June.
The chart shows Capitalmind Momentum returns versus the NIFTY 50 and the CNX 500 over the last 1 / 3 / 6 months and one year.
The year-to-date chart still looks ugly.
In Calendar-year 2022, the major indices are down 8%, and the Next50 is down 13%.
Capitalmind Premium Momentum Portfolio Performance summary since inception
The chart below shows the cumulative return chart since inception. i.e. What ₹100 invested on day 1 in Jan 2019 be worth it at the end of June 2022.
The chart shows performance (annualised returns, annualised volatility, and maximum drawdown from peak) since inception in January 2019.
Reading this chart: Annualised Returns, higher the better (obviously), volatility: lower the better, and Maximum Drawdown: measured as falls from the previous peak, lesser the better, i.e. the smallest negative value, the best possible value is zero, only possible with Fixed Deposits.
The Momentum portfolio tries to outperform the NIFTY while (hopefully) suffering lower drawdowns in deep corrections. The smallcase version of the portfolio has been live since Jan 2019; it still comfortably outpaces the benchmarks with lower volatility.
How about on a one-year rolling returns basis.
The chart below shows 1-year rolling returns, i.e. the 1-year returns as of any given date.
What next
Stocks across the board have looked weak over the past few months.
Auto has been the exception at an industry level, showing resilience, not just in June but through 2022.
If you’d like to call it that, the silver lining is that Indian stocks have not fallen as much as (most) other markets.
The Capitalmind momentum portfolio held significant cash for most of June, which helped while almost all stocks corrected. The portfolio replaced some stocks, but cash remains the largest allocation coming into July. In an environment where fixed income and gold haven’t shown strength, cash has been the relatively stronger asset.
But like we’ve seen in the last two and half years, that can change quickly.
Deepak wrote in his recent post about how the macros in India look pretty good, but that doesn’t mean the markets will rebound quickly.
Source: https://premium.capitalmind.in/2022/06/following-a-drunken-man-when-macros-overwhelm-markets/
It helps to have a limited number of preconceived notions of what should happen, so you can better react to what does happen. For now, we’re ducking and weaving.
Further Reading:
All Past Momentum Factsheets: Capitalmind Momentum Factsheets
Frequently asked questions about the Capitalmind Momentum Portfolio
