26% CAGR on LARGE CAP strategy?

Hello Investors!

Mi NNF 10 – our 10 stock, rotational momentum strategy based on the Nifty Next 50 universe has hit achieved the coveted milestone of returning 2x since going live on 12 Nov 2020 ( ~ 3 years ) at a staggering CAGR of 25% for a large cap strategy !

Before diving into the details of performance, we would like to highlight the specialty of Nifty Next 50 (also called Nifty Jnr) index.

The ALPHA in Nifty Jnr

Nifty Jnr basically comprises of the 51st to 100th stock in the Nifty market cap universe. Basically these are high growth stocks that have the potential to move to the Nifty 50 in the subsequent years if they manage to perform well.

Rs 100 invested in Nifty Jnr back in Oct 1995 (28 years) would now be worth Rs 4312 at a superb CAGR of 14.3% compared to Rs 2118 on the Nifty 50 at a CAGR of 11.4%. This is a remarkable outperformance for an index that is a part of large cap space.

Stocks graduating from Nifty Jnr to the Nifty 50

What is usually observed is that the growth of a stock is captured in Nifty Jnr index further to which it graduates to Nifty 50 where the growth either continues to mature or sputter around or fade away in a few cases.

UPL went into Nifty 50 in Oct 2017 and has remained choppy around the same level for over 6 years.

Some other examples of such stocks include Bajaj Finance, Bajaj Finserv and Tech Mahindra. One point to observe and note would that the majority of the growth tends to happen during the tenure of the stock at Nifty Jnr before they go on to become a part of the Nifty 50 index.

Mi NNF 10 tries to capture this growth prospect within this high potential – high alpha universe.

Celebrating Mi NNF 10’s milestone – 2x

The strategy was launched on 12 Nov 2020 and has crossed the coveted 2x return mark since then. Rs 100 invested in Mi NNF 10 on 12 Nov 2020 would now be worth Rs 204 compared to Rs 170 returned by it’s benchmark, the Nifty Jnr.

So – Nifty Jnr index outperformed the Nifty 50 index & Mi NNF 10 outperformed the Nifty Jnr as well quite comfortably.

Extracting a 25% CAGR on a large cap strategy ?

Large cap based strategies predominantly are known for their relative stability and not a high CAGR performance. Mi NNF 10 has been exceptional to have returned a handsome CAGR of 26% in the last 3 years despite operating in the large caps space.

Mi NNF 10 Winners each year !

Each period will have its own set of stocks or sectors that will be doing great. Investing in Mi NNF 10 will give you a complete peace of mind that the monthly rebalance ensures the best stocks with high potential occupy the portfolio.

Currently, HAL has been an exceptional winner clocking more than 2x return

Casino Math – Check! 

Summary of NNF10 strategy

WEEKENDINVESTING ANALYTICS PRIVATE LIMITED is a SEBI registered (SEBI Registration No. INH100008717) Research Analyst

Investments in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL (in case of IAs) and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.

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