My Momentum Portfolio Closed May +5.7% While Nifty 500 Went Nowhere
Housekeeping first: this update is late. May and June are going up together as a catch-up, and the monthly cadence resumes properly from July onwards. The numbers below are as of month-end; nothing has been adjusted in hindsight.
May was the month that answered April's most important question.
In the April update I wrote that the +11.5 points of alpha was mostly the cap-tilt premium riding a rebound, not stock-picking edge, and that a flat month would be the real test. May was that flat month. Nifty 500 finished at -0.12%, essentially a round trip to nowhere. The portfolio closed +5.65%.
How May Played Out
| Metric | Value |
|---|---|
| Month return | +5.65% |
| Nifty 500 return | -0.12% |
| Alpha vs Nifty 500 | +5.77 pp |
| Trading days | 19 |
| Up days / Down days | 12 / 7 |
| Best day | May 7 (+2.57%) |
| Worst day | May 12 (-2.13%) |
| Max drawdown | -4.54% |
Alpha with the market flat is a different animal from alpha in a rebound. When the index goes nowhere and the portfolio still compounds, the gap has to come from the names themselves and the system's willingness to hold the ones that are working. This is the column of evidence April could not provide.
And it came from the same basket: no change in holdings all month. Not a single name broke its trend rule, not even through the mid-month dip. The entire +5.65% was the April basket doing its job, held without interference.
The First Real Drawdown
April's -0.66% max drawdown was never going to survive contact with a normal market, and it didn't. From the May 7 peak to the May 12 low, the portfolio gave back -4.54% in four sessions. The broad market fell too, but the portfolio fell harder, which is exactly what a smallcap-heavy momentum basket does in a sharp pullback.
Two things worth noting about those four days:
- The system did nothing. No overrides, no panic trims. The rules did not flag exits, so nothing was sold into the weakness.
- The recovery was immediate. From the May 12 low to month-end, the portfolio reclaimed the entire drawdown and made a new high by May 27.
That sequence, sharp dip, no reaction, full recovery, is the whole argument for running rules instead of feelings. Living through it with real money is different from reading about it in a backtest, and the urge to "just trim a little" mid-drawdown was real. The rules said hold. Holding was right, this time. Sometimes it will not be, and the system accepts that trade.
What Did Not Work
- The drawdown was deeper than the index's. Higher beta cuts both ways. Anyone considering a strategy like this should look at the May 8-12 stretch, not the month-end number, and ask whether they could sit through it without touching anything.
- Mid-month chop cost real ground. The portfolio was up over 5% by May 7, spent two weeks round-tripping, and only broke decisively higher in the final week. Most of the month felt worse than the final number looks.
What's Next
June carries the same basket forward under the same rules, untouched since the April rebalance. After two strong months back to back, the base-rate expectation should be a quieter month, and the honest test now runs in the other direction: what does this system do when momentum itself cools off?
Personal trading account. Not investment advice. Past performance is not indicative of future results. Investments in securities are subject to market risks. I do not currently hold a SEBI Research Analyst registration; this is a personal portfolio update, not a research recommendation.