To capture the latest market trends, Wealthtrust Capital Services has launched the "TrendBlend Portfolio", functioning on the momentum strategy for investing. This portfolio targets the sectors and companies that are undergoing momentum at a given point in time. With continuous tracking of sectors, the research experts ascertain the sectors that are witnessing a fresh inflow of money. 

In this blog, we will discuss in detail the approach of our research desk in picking stocks for this portfolio so that you can discover the pulse of the market. 

Thought Process Behind This Portfolio

The stock market constantly sees a realignment of investments as sectors respond to recent developments. So, there is always one sector that is witnessing inflow and another sector that is witnessing outflow of money. With this portfolio, we get on the bandwagon and benefit from these emerging trends in the market. These stocks may not be those that will create value but those that will see upward momentum in the short run. We continuously track markets through our research tools and often rebalance portfolios to hop on to emerging trends. 

Our Investment Approach for TrendBlend Portfolio

We have a very unique investment approach while selecting stocks for this portfolio. Here’s a detailed breakdown of our approach & strategies with TrendBlend Portfolio

• Quantitative analysis: This portfolio is purely based on analysing quantitative factors by analysing both fundamentals and technical charts. We have developed research tools and tested our investment strategies to formulate our checklist of quantitative factors. These factors help us analyse the ‘money shifting’ among sectors. 

• Sector Rotation: This portfolio aligns itself with one of the most emerging investment trends by identifying sector rotation. Often, sectors with huge government spending, capacity expansion plans and increasing FPI interest see an upward movement. We track all these factors to identify such sectors that are sensitive to micro and macro factors in the short term — capitalizing on the momentum of these sectors. 

• Momentum-Based Strategy: This portfolio adopts a momentum-based strategy where we enter at a point when the stock price is rising and exit when they have peaked. This approach makes us return from the short-term upward movement in any sector. Sometimes, the sector might see momentum but not all companies become a part of this. So, within sectors, we identify such companies that are going to see the highest upward movement. For example, we applied this strategy while investing in TD Power systems. This stock might not fit in the Value investing strategy but has reaped good returns in the momentum strategy. Similarly, we have broking companies, wealth management companies and others that are witnessing high momentum. 

How Do We Manage Risk? 

Since this portfolio is purely based on capitalizing the volatility in the stocks, we have a strict risk management protocol for TrendBlend Portfolio. 

Broadly, our risk is managed through these two approaches: 

• Portfolio Rebalancing: We rebalance this portfolio very frequently typically every 15-20 days. This is to ensure that the positions are exited well before the stock price starts correcting. With our intensive research approach, we keep this portfolio updated with the latest market trends — minimizing risks and maximizing returns. 

• Capital Allocation: We take an 80/20 approach to capital allocation in this portfolio. Around 80% of the capital is allocated to small-cap companies that are subject to high momentum in the short term. The next big allocation is made in midcap companies that are witnessing high momentum due because of investments by mutual fund houses & FIIs. A small portion of the capital is allocated to large-cap companies since these are less volatile and thus don’t see large movements in the short term. This part balances volatility in this portfolio. 

Why Should You Invest in TrendBlend Portfolio?

Your search ends here if you want to invest in the latest market trends and emerging sectors. Launched in January 2024, this portfolio has outperformed the Equity Smallcap index by a handsome margin. Our risk management approach gives you a taste of both stability and the euphoria of momentum in the same portfolio. 

This quantitative research-based portfolio by Wealthtrust Capital Services could help you capture all the market trends in the emerging sectors. 

Click here to begin your trend-driven strategic investment.