INFRASTRUCTURE THEME shows sign of weakness as investors do cost averaging

Infrastructure managed to marginally outperform the broader market on Friday. It lost -0.37% to close at 997.101. It is currently trading -32% below it's 52 week high of 1484.09.

[Theme constituents]

~INFRASTRUCTURE showed a strong down trend over the last 3 months. During this period ~INFRASTRUCTURE lost -22.27% and saw a maximum drawdown of -25.45%. There were 4 short signals during this period that returned a cumulative of +20.99% to investors.

Trend

Monthly Performance

Alpha (outperformance)

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Return distribution

~INFRASTRUCTURE has been underperforming the NIFTY-50 index in recent time, after having outperformed till 5 Jan, 2018. ~INFRASTRUCTURE is currently at it's worst performance to the NIFTY-50 index and therefore does not make a good investment candidate. Over the last 2 years 11 months and 13 days, ~INFRASTRUCTURE underperformed the NIFTY-50 index on 45% days. Which indicates that on days ~INFRASTRUCTURE underperforms the NIFTY-50 index, it's performance is marginally worse than on the days it outperforms the NIFTY-50 index.

~INFRASTRUCTURE returned losses on 57% days in the last three months. During this time, it delivered on average -0.4% per day. It delivered it's worst daily return of -7.22%, during this period, on Friday, 12 Oct, 2018. There was initially a bearish trend during this period which started on 18 Sep, 2018 and went on till 25 Sep, 2018. The trend delivered -12.15% losses to investors. This was followed by a bullish trend that started on 26 Oct, 2018 and ended on 2 Nov, 2018. This bullish trend delivered +9.2% to investors.

~INFRASTRUCTURE had 4 profitable and 8 loss making months over the last year. During the last year, ~INFRASTRUCTURE underperformed NIFTY-50 index on monthly return basis. ~INFRASTRUCTURE was also a more risky investment than NIFTY-50 index as it's worst month in the last year, Sep 2018, returned -18.24% compared to -6.42% returned by NIFTY-50 index in Sep 2018. ~INFRASTRUCTURE had a longer winning streak of losing months than NIFTY-50 index. It went down in 3 straight months (from Jan 2018 to Mar 2018) during which period it delivered -8.2%. It is interesting to note that both ~INFRASTRUCTURE and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Time is more value than money. You can get more money, but you cannot get more time.
-- Jim Rohn

~INFRASTRUCTURE is becoming more volatile overall. In comparison, the NIFTY-50 index is seeing a fall in volatility. During the last three months, there was a significant surge in ~INFRASTRUCTURE's volatility from 17 Sep, 2018 to 12 Oct, 2018. While there was a significant fall in the NIFTY-50 index's volatility from 21 Sep, 2018 to 5 Dec, 2018.

Advanced/professional short-term investors should note that ~INFRASTRUCTURE has significant positive skewness in it's return distribution. This indicates that investors can expect ~INFRASTRUCTURE to recover from drawdowns quickly. Which makes ~INFRASTRUCTURE a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

~INFRASTRUCTURE has more chance of extreme outcomes than the NIFTY-50 index. Therefore, ~INFRASTRUCTURE must receive a lower allocation than NIFTY-50 in your portfolio. ~INFRASTRUCTURE usually has shorter drawdown period than the NIFTY-50 index.

On a general note (since you are interested in ~INFRASTRUCTURE), two mid cap instruments that deserve special mention are AARTIIND and LTI. They have significantly outperformed the overall market.