13.39 -0.25 (-1.83%) Sell

Stop-loss on the minds of FDUS investors as it significantly underperforms

13 min read

FDUS ranked among the worst performers today. On a longer term basis, investors in FIDUS INVESTMENT CORP made +0.02% per day. Friday's performance of -1.83% was a significant underperformance compared to it's daily average.

[Themes containing FDUS]

Buy-and-Hold investors in FDUS experienced a maximum drawdown of -10.99% over the last three months. It lost -8.04% during this 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 +1.69%.


FDUS has been outperforming the SP500 index in recent time. Over the last 2 years 11 months and 10 days, FDUS underperformed the SP500 index on 50% days. Which indicates that on days FDUS underperforms the SP500 index, it's performance is marginally worse than on the days it outperforms the SP500 index.

During the last three months FDUS was mostly loss making and delivered on average -0.13% per day. It's best return during this period (of +2.27%) was on Monday, 3 Dec, 2018. While it's worst loss in the same period (of -3.81%) was on Thursday, 6 Dec, 2018. There was initially a bearish trend during this period which started on 17 Oct, 2018 and went on till 24 Oct, 2018. The trend delivered -6.01% losses to investors. This was followed by a bullish trend that started on 29 Oct, 2018 and ended on 1 Nov, 2018. This bullish trend delivered +4.59% to investors.

FDUS had 5 profitable and 7 loss making months over the last year. During the last year, FDUS underperformed SP500 index on monthly return basis. FDUS was also a more risky investment than SP500 index as it's worst month in the last year, Feb 2018, returned -12.38% compared to -7.28% returned by SP500 index in Oct 2018. FDUS had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year.

"You and I come by road or rail, but economists travel on infrastructure.

FDUS 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 FDUS's volatility from 17 Sep, 2018 to 6 Nov, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that FDUS 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.

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

On a general note (since you are interested in FDUS), three instruments that deserve special mention are TNDM, NIHD and DFBG. They have all outperformed the market and must be closely watched for investment opportunities.

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