The ASX Top 5 is a high-growth stock selection strategy applied to ASX 100 blue chip companies. It's data-driven, objective, and void of human emotion.
Every month, we tell you which stocks to buy and sell. The formula used has historically provided a mathematical edge that, if applied consistently, has produced returns far superior to the S&P/ASX 100 Accumulation Index.
The primary goal of the ASX Top 5 is to locate large-cap stocks rising in controlled uptrends. Volatility is avoided, predictable and steady uptrends are preferred.
Read the Whitepaper for the step-by-step process we followed to create the ASX Top 5 strategy.
On the last trading day of the month, we rank all ASX 100 companies from best to worst according to our ASX Top 5 algorithm. From that list, we determine the top 5 companies.
The following day (i.e. the first trading day of next month), you sell the companies that exited the list, and buy the companies that entered the list, in equal position sizes, from the proceeds of your sales.
Expect between 1 and 2 portfolio changes each month on average.
If four or fewer meet the stock selection criteria (e.g. during bear markets), the portfolio will allocate some funds to cash.
The ASX Top 5 is 100% data-driven.
The algorithm selects the best performing large-cap companies according to momentum quality and relative strength. A filter is then applied to minimise risk and achieve optimum risk-adjusted returns.
Stress-tested through millions of portfolio combinations, the ASX Top 5 algorithm has been consistent and reliable. Historically, it’s been defensive during bear markets and races ahead in bull markets.
|Key Statistics (2001 to 2021)|
|Avg. Trade Duration||80 days|
|Avg. Cash Holding||14%|
Compounded, excluding brokerage, and dividends reinvested.
Market Index started trading the system on 2/1/20.
Historical statistics were generated from back-testing software that followed the ASX Top 5 strategy from 2/1/01 to 31/3/21.
Past performance is not a reliable indicator of future performance.
The ATO likes to get paid. Subtracting tax every year significantly affects a portfolio's returns.
Since 2001, the strategy has generated a Compounded Annual Growth Rate (CAGR) of +27.30% per annum with an average holding time of 80 days.
The maximum open drawdown (unrealised capital loss) was -30.07% in January 2008, which is significantly better than the -49.39% maximum drawdown of the S&P/ASX 100 Accumulation Index.
Please note, past performance is not a reliable indicator of future performance.
Compounded, tax-excluded and dividends reinvested. ^
|ASX Top 5||S&P/ASX 100 Accumulation|
|Annual Sharpe Ratio||1.4||0.5|
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Monthly subscriptions are renewed every month and cost $59. Annual subscriptions are renewed each year and receive a 17% discount (equivalent to 2 free months). The total cost for an annual plan is $588.
Yes, it might be, but please check with your accountant.
Plans auto-renew at the end of the billing period (e.g. monthly or yearly).
You can downgrade to a free plan at any time in the Members Dashboard, and it will take effect from the next billing cycle.
We offer a 100% money-back guarantee within 14 days of first subscribing.
Yes - you can cancel or change your plan at anytime via the account dashboard. Refunds will only apply if requested within 14 days of first subscribing.
We recommend to start your plan and buy the recommended stocks at any time during month, except if there’s less than 7 days before the last trading day of the month. History shows there is negligible difference on the long term results, but we put the 7 day period in simply to avoid extra brokerage fees and time spent buying/selling.
We have some important information to share with you:
Staff Trading Policy
Market Index staff trade the ASX Top 5 strategy and hold shares in all companies recommended. Any investor following the strategy will be buying and selling shares alongside Market Index staff.
Market Index staff commenced trading the ASX Top 5 strategy on 2 January 2020.
Back-testing software was used to generate all statistics following the ASX Top 5 strategy. All trades are 100% hypothetical. Simulated results are calculated in perfect conditions without slippage. Back-testing ignores real-life issues like liquidity, taxation and human error.
Market Index can’t stress enough; investing is risky and can result in loss of capital. Past results generated with the benefit of hindsight should not be relied upon to predict future returns. Please consult a licensed adviser to see if the strategy is right for you.
All Historical Statistics
Back-tested performance figures generated by following the ASX Top 5 stock selection methodology from 2 January 2001 to 31 March 2021. Assumes dividends reinvested on the ex-dividend date. Applicable tax and transaction costs not deducted.
Market Index provides General Advice only. The information provided is not personal advice as we do not take into account your individual circumstances, investment objectives or financial situation. We recommend seeking advice from a financial adviser or stockbroker before making any investment decision.
All pricing is in Australian dollars (AUD).