14.2 -0.01 (-0.07%) Sell

The party never started for CGBD investors as it significantly underperforms

13 min read

CGBD was among the worst performers today. On a longer term basis, investors in TCG BDC, INC. made +0.01% per day. Wednesday's performance of -0.07% was a significant underperformance compared to it's daily average.

[Themes containing CGBD]

Buy-and-Hold investors in CGBD experienced a maximum drawdown of -17.78% over the last three months. It returned -16.22% during this strong down trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +12.22%.


CGBD has been underperforming the SP500 index in recent time, after having outperformed till 27 Jun, 2017. Over the last 1 year and 6 months, CGBD underperformed the SP500 index on 51% days.

CGBD returned losses on 66% days in the last three months. During this time, it delivered on average -0.28% per day. It delivered it's worst daily return of -3.43%, during this period, on Thursday, 4 Oct, 2018. There was initially a bullish trend during this period which started on 13 Sep, 2018 and went on till 17 Sep, 2018. The bullish trend returned +1.59% to investors. This was followed by a bearish trend that started on 4 Dec, 2018 and ended on 12 Dec, 2018. This bearish trend lost -9.57% of investor capital.

On monthly basis, CGBD delivered losses in more months over the last year, than profits. CGBD delivered profits less regularly than SP500 index. CGBD was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -8.39% compared to -7.28% returned by SP500 index in Oct 2018. CGBD had a longer winning streak of losing months than SP500 index. It went down in 5 straight months (from Aug 2018 to Dec 2018) during which period it delivered -22.44%. It is interesting to note that both CGBD and SP500 index significantly outperform during months when quarterly/annual results are announced.

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CGBD is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in CGBD's volatility from 19 Sep, 2018 to 11 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 13 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that CGBD has positive skewness in it's return distribution. This indicates that investors can expect CGBD to make attempts to recover from drawdowns quickly. Which makes CGBD a good candidate for momentum based trading on short-term bullish trends or counter-trends.

SP500 index has more chance of extreme outcomes than CGBD. Therefore, SP500 must receive a lower allocation than CGBD in your portfolio. CGBD usually has shorter drawdown period than the SP500 index.

On a general note (since you are interested in CGBD), two instruments that have delivered similar performance as CGBD are AJX and CXP. They are suitable as good alternative investment candidates that can diversify your portfolio.

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