Performance information Disclosure

The data and index values illustrated on performance charts are only for informational purposes. It is not to be considered as a recommendation of investment or strategy where the client should rely on to make an investment decision. Even though the historical data used for the calculation of performances is collected from reliable sources, this is not audited and therefore may contain errors in pricing.

For the content of market research, “Trade Capital Markets” relies on external sources to collect data and holds no responsibility for the validity of those information. The client is responsible for the validation of information and data that aid him to take investment decisions.

Investment decision must not be based only on the information provided in the performance charts and market research, but also on client’s unique individual needs and risk tolerance.

Calculating Thematic portfolio Performance

Back tested Thematic portfolios are baskets of stocks and are used as models for the purpose of performance presentation. The data shown is hypothetical and is provided to illustrate the risk and return of the portfolio. The calculation of returns does not include any fees and deductions for tax purposes. Portfolio returns are calculated retroactively with the benefit of hindsight.

In order to show the past performance for an indicative period we used historical prices adjusted for corporate actions like stock and cash dividends, stock splits, spin-off etc. We also used the value of 100 at the starting date and end-of-month prices. Portfolio returns reflect portfolio’s rebalancing which occurs semi-annually, and any capital gains are reinvested into the portfolio. The weight of each security is established at the inception date and is fluctuated according to its performance. After the establishment of the portfolio there is a periodic review where symbols may be replaced or removed from the portfolio.

Example of Performance Calculation

Consider an equally weighed portfolio made up of two stocks:

Stock Weight %
AAA 50%
BBB 50%
Date AAA Price Weight A BBB Price Weight Performance
01/01/2019 $ 100 50% $ 110 50%
02/01/2019 $ 113 56.5% (1) $ 125 56.8% (2) 13.32% (3)
03/01/2019 $ 104 52% (4) $ 109 49.5% (5) -10.4% (6)
04/01/2019 $ 107 53.5% (7) $ 112 50.9% (8) 2.81% (9)
05/01/2019 $ 116 54.2% (10) $ 119 53.1% (11) 2.77 (12)

At inception date the portfolio has 50 of stock YYY which equals to 100% of the portfolio.

On 02/01/2019 the portfolio value increased by 13.3%.

Portfolio performance calculations:

(Todays stock price/yesterday’s stock price) * Yesterdays weight

(1) Stock AAA: ($113/$100) *50% = 56.5%
(2) Stock BBB: ($125/$110) *50% = 56.8%

(Today’s total Value / yesterday’s total Value) – 1

(3) {(56.5%+56.8%)/(50%+50%) } -1
(113.3%/100%) – 1 = 13.32%

On 03/01/2019 the portfolio lost 10.4%.
(4) Stock AAA: ($104/$113) *56.5% = 52%
(5) Stock BBB: ($109/$125) *56.8% = 49.5%
(6) {(52%+49.5%)/(56.5%+56.8%) / } -1
(101.5%/113.3%)-1 = -10.4%

On 04/01/2019 the portfolio lost 10.4%.
(7) Stock AAA: ($107/$104) *52% = 53.49%
(8) Stock BBB: ($112/$109) *49.5% = 50.86%
(9) {(53.49%+50.86%) / (52%+49.5%)} -1
(104.355%/101.5%)-1 = 2.81%

To calculate the performance 05/01/2019 we must consider the rebalancing occurred on previous day.

Calculation of performance with rebalancing:

(Todays stock price/yesterday’s stock price) * Weight at Inception

(10) Stock AAA: ($117/$107) *50% = 54.2%
(11) Stock BBB: ($119/$112) *50% = 53.1%
(12) {(54.2%+53.1%) / (53.5%+50.9%)} -1
(107.8%/104.4%)-1 = 2.77%