ASX Top 5 Portfolio

Overview

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.

Market-beating Returns

Compounded, excluding brokerage, and dividends reinvested ^

How It Works

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.

System Details

The ASX Top 5 is 100% data-driven.

The algorithm, designed by experts, selects the best performing large-cap companies according to quality, momentum 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. It's defensive during bear markets and races ahead in bull markets.

Key Statistics (2001 to 2021)
Annual Return 27.30%
Win Rate 58%
Avg. Win 17.96%
Avg. Loss -6.52%
Max Drawdown -30.07%
Avg. Trade Duration 80 days
Avg. Cash Holding 14%

Notes ^

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.

Historical 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.

Annual Returns (%)

Compounded, tax-excluded and dividends reinvested. ^

ASX Top 5 S&P/ASX 100 Accumulation
Annual Return 27.30% 8.38%
Annual Volatility 20.15% 14.33%
Annual Sharpe Ratio 1.4 0.5
Median Drawdown -4.80% -4.41%
Max Drawdown -30.07% -49.39%

Frequently Asked Questions (FAQ)

What payment methods do you accept?

We accept VISA, MasterCard and American Express.

Please contact us for details to pay by PayPal or Direct Deposit.

What is the difference between Monthly and Annual subscriptions?

Annual subscriptions receive a 17% discount (equivalent to 2 free months).

Is my subscription tax deductible?

Yes, it might be, but please check with your accountant.

How often am I billed?

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.

What is the Market Index refund policy?

We offer a 100% money-back guarantee within 14 days of first subscribing.

Disclaimers ^

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.

Performance Disclaimer

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.

General Advice

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.

Prices

All pricing is in Australian dollars (AUD).

^ Past performance is not a reliable indicator of future performance.
PDF

ASX Top 5 Whitepaper