Building a "20 Rockets India" Portfolio from Nifty Total Market
20 Strong Stock Portfolio from Nifty Total Market Universe.
Indian markets are near all time high and no better time to sit down and introduce a theoretical study of a 20 stock portfolio re-balanced every week. Do note rebalance doesn’t necessarily mean that we will exit or enter stocks every week, it just means that there will be a re-balance study that will be triggered every end of day Friday and stocks necessary changes will be pushed out.
As part of this study, i will share weekly progress of the portfolio, how it has been doing. For the purposes of this study, i will pick two benchmarks - Nifty Mid Smallcap 400 and Parag Parikh Flexi Cap Mutual Fund.
Do note that i am not a registered investment advisor with SEBI and all my posts are purely educational in nature. The goal here is to educate the reader on the process and less on a specific stock.
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Portfolio Rules
Stock has to be part of the Nifty Total Market Index on the day of the rebalance.
Any stock which is not part of the Nifty Total Market Index on rebalance day will be exited.
Momentum Ratios are calculated for various periods and a normalized weighted score is arrived at the end. Momentum ratio for a period is arrived at by calculating the returns for the period and dividing them by the volatility of the stock for the period.
Top 20 stocks are made part of the portfolio initially.
Any stock which is not in the top 40 rank on the rebalance day will be exited and replaced by a stock in the top 20 rank. Only 20 stocks will be held in the portfolio at any given time.
Portfolio will be rebalanced every week and entries and exits will be published.
For the purposes of tracking, price of the stock at 9:30am on the re-balance day will be considered as the transaction price.
New buys will be dis-allowed if Nifty 50 trades below its 144 day exponential moving average.
20 Rockets India
We are starting with an initial capital of 200000 Rs for this portfolio. I will update the buy price of the stocks (basis their price at 9:30am on Monday 5th Feb 2024) and other details in another post during the week or next week.
Names of the stocks to be bought and desired weights are published below.