September Performance

With another month under our belt, it is time to look at what matters the most for our MS Microcap Quality Index (MSMqi): Performance.

Continued momentum

We were able to maintain gains throughout September and add 3.46% this month. The MSMqi ended the month up 67.89%, on average, since inception in February 2022.

This compares well to the S&P 500, up 39.21% since the inception of the MSMqi in February 2022. It was up 2.78% for the month.

NASDAQ is catching up. The index was up 3.44% for the month and is now up 31.89% since the inception of the MSMqi.

We think the returns of the MSMqi is a confirmation of our belief that there is a strong change in investor sentiment, where they are deploying capital away from overvalued large caps to undervalued smaller cap names.

The microcap index continues to struggle. iShares declined 0.24%. The ETF has significantly lagged behind the S&P and NASDAQ benchmarks since the inception of the MSMqi, with an average return of only 0.63%.

Here are the YTD comparisons.

The first 1,000%

While we did not see any new multi-bagger in September, we did record an impressive surge by TSSI. We added this data center-related company just in March of this year, and in September, it hit a gain of 1,000%. We are excited to see what TSSI has in store for us in the future. You can read the original Cliff Note here. At this link, you can check out the recent management interview. Here are the top five stocks in the index.

Spotlight Stocks continue to perform

While we did not add a new one in September, we can safely say the performance continues to be strong.

You can see all the Spotlights here. We will continue to opportunistically add Spotlights.

One-third multi-bagged, two-thirds in positive territory

While we did not add a new multi-bagger (although there are few hot candidates right now), on average, every third stock added to the MSMqi achieved multi-bagger status. You can see all of the multi-baggers here. On average, it took ten months for a multi-bagger stock to reach a return of 100%.

What we are also proud of is that around two-thirds of the stocks in MSMQI are up right now. This means our hit rate continues to be strong.