Smallcap Quality & Growth Model
Windmill Capital
Quality stocks showing consistent earnings growth
3Y CAGR
6.36%
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Daily Change
Today's change in this smallcase is
7Y CAGR
CAGR (Compounded Annual Growth Rate) indicates the average yearly return generated by a smallcase from the date of launch. Only live data is considered to calculate the CAGR. Thus, this smallcase has given returns on an average every year since Apr 4, 2016
High Volatility
Stock prices move up and down on a daily basis, resulting in fluctuating investment value. High volatility indicates high fluctuation is expected in the investment made in this smallcase
About the smallcase
Selecting quality growth companies is essential to generate wealth in the long term in a steady manner. This smallcase seeks to select such companies from the smallcap universe.
- Selected companies are experiencing positive earnings growth in the recent past as well as expected to generate positive earnings growth in the future
- Consistent free cash flow generation, comfortable leverage positions and high return on equity also highlights the quality as well as the prudent capital management of the companies
This smallcase is best suited for investors looking to take exposure through quality smallcap stocks for passive long-term investing
You can access the asset allocation version of this smallcase with better risk-adjusted returns here
Methodology
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Methodology
universe
All publicly traded companies on the National Stock Exchange of India, and rank from 251-750 by market capitalization, are included in the universe
research
- At Windmill Capital, our team cultivates investment philosophies rooted in cutting-edge academic research and insightful white papers. These resources lay the groundwork for a comprehensive understanding of market dynamics, risk management, and optimal return strategies. Subsequently, our sophisticated testing mechanisms allow us to create portfolios that are both theoretically robust and empirically validated
- To further refine our models, we harness advanced mathematical, statistical, and analytical methods. These may include optimization algorithms that balance risk and return, as well as statistical analyses to uncover factor regimes and correlations. Such techniques enhance our stock selection process and portfolio weighting decisions, ensuring precision and effectiveness
- Smallcap Quality & Growth smallcase predominantly selects smallcap stocks/ETFs demonstrating consistent earnings growth, with strong future growth potential. Additionally, the chosen stocks exhibit steady free cash flow (FCF) and high return on equity (ROE), emphasizing the quality and financial strength of the businesses
stockScreening
- Stocks/ETFs qualifying the above mentioned research criteria are selected for further analysis
- Proprietary liquidity filters are applied to remove ill-liquid stocks/ETFs from this list
- A special check is further applied to remove stocks, where a significant part of the promoter holdings are pledged
- Stocks/ETFs are further removed on the basis of red flags such as their presence in ASM/GSM list of the exchanges, deep negative news or sentiment etc
weighting
This final list of selected stocks making part of the portfolio is equally weighted
rebalance
This smallcase has a quarterly rebalance schedule. Once every quarter, the research team reviews this smallcase and realign the weights with the selected asset allocation strategy for the next quarter
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