Small Cap Stars THEME

1564.6 +9.34 (+0.6%) Sell

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SMALLCAPSTARS THEME investors disappointed by market underperformance

14 min read

~SMALLCAPSTARS significantly underperformed today. On a longer term basis, investors in Small Cap Stars made +0.06% per day. Tuesday's performance of +0.6% was a significant outperformance compared to it's daily average.

[Theme constituents]

Buy-and-Hold investors in ~SMALLCAPSTARS experienced a maximum drawdown of -13.91% over the last three months. It returned -12.24% 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 +10.49%.


~SMALLCAPSTARS has been underperforming the SP500 index in recent time, after having outperformed till 10 Sep, 2018. Over the last 2 years 11 months and 14 days, ~SMALLCAPSTARS outperformed the SP500 index on 54% days.

During the last three months ~SMALLCAPSTARS was mostly loss making and delivered on average -0.2% per day. It's best return during this period (of +2.95%) was on Thursday, 25 Oct, 2018. While it's worst loss in the same period (of -3.62%) was on Tuesday, 4 Dec, 2018. There was initially a bearish trend during this period which started on 9 Oct, 2018 and went on till 12 Oct, 2018. The trend delivered -5.06% losses to investors. This was followed by a bullish trend that started on 29 Oct, 2018 and ended on 2 Nov, 2018. This bullish trend delivered +6.33% to investors.

On monthly basis, ~SMALLCAPSTARS delivered profits in more months over the last year, than losses. ~SMALLCAPSTARS delivered profits less regularly than SP500 index. ~SMALLCAPSTARS was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -8.73% compared to -7.75% returned by SP500 index in Dec 2018. ~SMALLCAPSTARS and SP500 index, both had periods of 6 consecutive profitable months. It is interesting to note that both ~SMALLCAPSTARS and SP500 index significantly outperform during months when quarterly/annual results are announced.

"Even though the quotes above come from some of the most intelligent people on Wall Street, the ideas behind them are both quite simple and insightful.

~SMALLCAPSTARS 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 ~SMALLCAPSTARS's volatility from 26 Sep, 2018 to 25 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.

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

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

On a general note (since you are interested in ~SMALLCAPSTARS), PRQR has performed really well this year and deserves to be closely tracked for investment opportunities.

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