The Mi NNF 10 smallcase – A passive money-spinning strategy?

The smallcase Mi NNF10 is a monthly rebalanced rotational momentum portfolio of 10 stocks carved out of the Nifty Next 50 Index stocks (also called Nifty Jnr). It is designed to extract alpha from within this highly liquid and coveted group of large-cap stocks that make up the 51st -100th market cap positions.

TL;DR –

Mi NNF 10 can be an amazing companion – a core strategy to help you towards your financial independence goals.

• Top quality stocks
• Outperformance against its benchmark – the Nifty Jnr Index
• Much Higher CAGR than Nifty Jnr
• Significantly Lower Drawdowns compared to Nifty Jnr to keep you calm during weak market conditions
• A great core companion for your long-term goals
• How has this smallcase performed?
• What are investors saying about this smallcase?
  

Let us begin this with a quick tabular description depicting Mi NNF 10’s outperformance (vs) the Nifty Next 50 Index since 01 Apr 2016

Nifty Next 50 (v) Nifty 50

Nifty Next 50 has always had an alpha compared to the Nifty 50. Below is a chart that compares the two indices:

Chart – Since 1996

Mi NNF 10 – Cashing in on the Nifty Jnr Alpha

The Strategy NNF10 is a momentum portfolio of 10 stocks from the Nifty Next 50 universe. The portfolio always has allocation to 10 stocks and never goes to cash. It also always has a 10% allocation at the start of each month to each of its constituents. The portfolio is balanced based on the closing prices on the last trading day of each month and the rebalance sent out for execution on the first day of the next month. The logic of the strategy is the classic momentum way to weed out losers and include winning stocks . You can say this is akin to the Darwin’s Theory of Evolution -Survival of the Fittest.

As you can see from the chart below. Rs 100 invested in Mi NNF 10 on 01 Apr 2016 would now be equal to Rs 353 while the same money invested in the index – Nifty Jnr would have yielded Rs 227.

The strategy will require 5 min of your time on each first trading day of the month, and you are all set to go. 

The strategy’s performance has been thoroughly tested on actual index constituents (survivorship bias-free data) over the last 10 years. Still, we have used the data from April 2016 as standard for all strategies as WeekendInvesting began its operations during the same period.

The best part about Mi NNF 10 has been the fact that the strategy has a much higher CAGR @ (+21.1%) as compared to (+13.3%) on the Nifty Jnr Index. But that is not the best part yet. This strategy has also massively outperformed the benchmark during weak market scenarios with an incredibly lower Max drawdown @ 23.6% compared to a much painful 42% on the benchmark.

SIP Performance

Performance after going LIVE on 12 Nov 2020

We launched this strategy on 12 Nov 2020 and it’s been a SMASHING SUCCESS right since day 1 amassing spectacular performance and winning hearts of several thousands of its investors. Take a look at the below chart.

Let’s talk about some winners and losers of Mi NNF 10

Stock Stories from Mi NNF 10

Let us take a look at our journey with top two winners

Below are examples of two of the worst performers in the strategy

As you can see in all the above cases, the strategy effectively allowed winners to run as far as possible before momentum faded out.

Some Testimonials for Mi NNF 10

Come in with a mindset to stay for as long as possible (preferably 4+ years) and have a phenomenal journey!

Hope to see you in WeekendInvesting Family soon.