MKTCAP451TO500 THEME shows sign of weakness as investors do cost averaging

Market Cap 451-500 showed marginal outperformance on Friday. It delivered -0.41% to close at 1635.13. On a day when the overall market breadth was 71%, it closed higher than 60% of the market. In comparison, the benchmark NIFTY-50 index closed today at +0.13%.

[Theme constituents]

~MKTCAP451TO500 showed a strong bullish trend over the last 3 months. During this period ~MKTCAP451TO500 increased by +22.08% and saw a maximum drawdown of -8.59%. There was a long signal during this period which returned +8.78%.

Trend

Monthly Performance

Alpha (outperformance)

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~MKTCAP451TO500 has been underperforming the NIFTY-50 index in recent time. It showed significant outperformance (compared to the NIFTY-50 index) from 26 Sep, 2018 to 12 Nov, 2018. Over the last 2 years 11 months and 13 days, ~MKTCAP451TO500 outperformed the NIFTY-50 index on 55% days.

During the last three months ~MKTCAP451TO500 delivered losses on 59% days. However, it still managed to end this period in a profit. It's best return during this period (of +22.94%) was on Thursday, 27 Sep, 2018. While it's worst loss in the same period (of -3.64%) was on Friday, 28 Sep, 2018. The longest stort-term trend during this period was 9 profitable days, which started on 29 Oct, 2018 and went on till 9 Nov, 2018. This bullish trend returned +9.58% to investors.

The last 12 months saw ~MKTCAP451TO500's investors making profits in 5 months and incurring losses in 7 months. During the last year, ~MKTCAP451TO500 delivered profits in more months than NIFTY-50 index. ~MKTCAP451TO500 significantly outperformed NIFTY-50 index in Oct 2018, when it returned +13.13% compared to +6.56% returned by NIFTY-50 index during it's best month in the last one year - Jul 2018. ~MKTCAP451TO500 had a longer winning streak of profitable months than NIFTY-50 index. It went up in 4 straight months (from Jul 2018 to Oct 2018) during which period it delivered +26.34%. It is interesting to note that both ~MKTCAP451TO500 and NIFTY-50 index significantly outperform during months when quarterly/annual results are announced.

Try to save something while your salary is small; It's impossible to save after you begin to earn more.
-- Jack Benny

~MKTCAP451TO500 is currently seeing overall increase in volatility. In comparison, the NIFTY-50 index is seeing decrease in volatility. During the last three months, there was a significant surge in ~MKTCAP451TO500's volatility from 17 Sep, 2018 to 27 Sep, 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 ~MKTCAP451TO500 has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.

NIFTY-50 index has more chance of extreme outcomes than ~MKTCAP451TO500. Therefore, NIFTY-50 must receive a lower allocation than ~MKTCAP451TO500 in your portfolio. NIFTY-50 index usually has shorter drawdown period than ~MKTCAP451TO500.

Based on your interest in ~MKTCAP451TO500 you may find it interesting to know that ~PLASTIC, ~GRINDINGWHEEL and SKFINDIA have all performed similar to ~MKTCAP451TO500 and qualify as alternative investment candidates that must be evaluated for diversification.