September Active Portfolio Return
Active Portfolio dips 1.7% in September but up 8% for October
Sorry for the delay in publishing this return update. We needed to update 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) eased slightly this month after its strong 10.5% run in August. The AP was down 1.7% on a month-to-month basis, bringing its CAGR to around 40% since inception.
Despite the slight pullback, the AP remains solidly ahead of the market and continues to compound at an exceptional rate. In fact, the portfolio has bounced back strongly. As of late October, it’s already up about 8% for the month, showing continued strength and momentum.
Recall that the AP was launched in mid-2022 with a $100,000 capital assumption and has since grown to over $310,000, maintaining impressive long-term performance.
In September, the MSMqi 2022 gained 2.9%, while the MSMqi 2025 posted a 1.37% increase. The Active Portfolio (AP) still remains well ahead of both indexes since inception, demonstrating the value of our active stock-picking strategy and strong long-term alpha generation. You can read about the MSMqi 2022 and 2025 September 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.
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 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.
Portfolio Alerts
During the month, we made several adjustments to further strengthen our positioning. We added one new position, PPIH, which we believe has the potential to become a large multibagger. It’s actually a company I’ve personally owned since 2019 and one that has already delivered significant returns over the years. By the end of September, the stock was up 144% since we added to the AP on June 13, 2024.
We also increased our exposure to three existing holdings (KLNG, KTEL, and PXHI) and trimmed our stake in ACFN to lock in some multibagger gains and take advantage of better opportunities elsewhere. You can read more about these moves here.
About Side Pocket Trades: Side Pocket Trades are small, shorter term trades we send alerts on to provide a little extra alpha (10% to 20%) to the Active Portfolio. These are not usually day trades and can remain alive until we feel that the trade opportunity has been fully played out. Lots of these trades will be based on information arbitrage, where investors have not caught on to information hidden in press releases, earnings call transcripts, SEC & SEDAR filings and investor presentations. We track and archive all trades.
Although we did not add any new Side Pocket Trades in September, the overall performance of this strategy remains strong. As of the end of the month, the average return for these extra-alpha positions stood at 32%. Three positions remain active: one up 23%, one down 30%, and an additional position up 273%. You can see all current Side Pocket Trade positions below.