October Active Portfolio Return
Active Portfolio rebounds with 8.6% gain in October
Please note that we updated the method used to calculate returns. We now more accurately account for corporate actions, such as dividends, to provide more accurate performance figures. In line with this change, we’ve also added a new “Corporate Actions” tab to our Active Portfolio sheet, which you can view here.
The Active Portfolio (AP) advanced strongly this October, rising 8.6% on a month-to-month basis after last month’s modest pullback. This brings the AP’s CAGR to 42% since inception in 2022. However, so far, the AP has pulled back in November, due to some weakness in some tech stocks in the AP, a set-up we see as an opportunity for those of you looking to join our AP Substack.
The AP’s assumed starting capital of $100,000 in mid-2022 has grown to $337,448 by the end of October, continuing to outperform the broader market.
About the Active Portfolio: The Active Portfolio is a model portfolio we launched in the middle of 2022. This simulated portfolio includes our highest-conviction medium to long-term investment ideas within the MS Mircrocap Quality Index Platform (MSMqi) platform as well as from our broader research pipeline outside of the platform. Unlike our MSMqi products, which are diversified and will eventually grow to include hundreds of equally weighted stocks, the Active Portfolio is intentionally more concentrated—typically 10 to 20 differently weighted names at a time. The portfolio incorporates a variety of strategies, including momentum, buy-the-dip, special situations, turnarounds, and other setups where we see outsized risk-reward potential. We make and disclose adjustments to the portfolio through alerts. Each stock in the AP includes continual price target commentary so subscribers can track our evolving conviction levels. While this is not a day-trading strategy, we occasionally employ “side-pocket” swing trades around core holdings to capture short-term alpha.
In October, the MSMqi 2022 gained 0.82%, while the MSMqi 2025 rose 1.39%. The Active Portfolio (AP) continues to outperform both indexes since inception, reflecting the continued success of our active management and disciplined stock-picking strategy. Read more about the MSMqi 2022 and 2025 October performance here.
About the MSMqi 2022: The MSMqi 2022 is our original index that we launched in February 2022 and holds 110 stocks. We no longer add stocks to this index, but still track the performance for transparency purposes. Each stock in the index is accompanied by a research Cliff Note. We now add new stocks to the MSMqi 2025.
About the MSMqi 2025: The MSMqi 2025 was our first rebalancing of the MSMqi 2022. The MSMqi 2022 is our original index that we launched in February 2022 and holds 110 stocks. After 3 years, we decided to perform our first rebalancing by removing 23 stocks that no longer qualify to be included in the index. We are calling this MSMqi 2025. New stocks are now added to the 2025 MSMqi. You can learn more about that decision by going here. Each stock in the index is accompanied by a research Cliff Note.
Portfolio Alerts
This month, we made three adjustments to the Active Portfolio (AP) to enhance positioning and capture new opportunities.
We increased our position in PXHI by roughly 50% (adding ~$2,000), following the announced $1.15 special dividend. We also initiated two new positions: a small, higher-risk 1% position in VELO (~$3,000 @ ~$5.00), and a 3% position