15 high-conviction picks from 500 small and microcap stocks. Rules only.
The combined Nifty Smallcap 250 and Microcap 250 universe gives the model 500 stocks to rank each month. The top 15 — capped at 2 per industry — are selected and held in equal weight. Small and microcap stocks are genuinely different from large-cap, so the model uses a proprietary multi-factor framework purpose-built for this segment's liquidity dynamics.
The 5-year backtest shows, after 20% short-term capital-gains tax, 44.3% CAGR against a 11.03% Nifty Smallcap 250 benchmark. Maximum drawdown was -24.2%, against -24.8% for its index over the same window — a window that held no small-cap crash like 2008's or 2018–20's. The Sharpe ratio was 1.62, against the index's 0.36.
Here are its return per unit of risk and its worst peak-to-trough fall, measured over the same backtest window as everything else on this page, against its own index:
Its index's deepest fall since 2005: -76.0% (Jan 2008 → Mar 2009), and back to its old high in Sep 2014.
And the return itself, beside real funds in its category:
Ours pays 20% short-term capital-gains tax every month it books a profit, because it rebalances monthly. The funds and the index are bought once and held, so they pay 12.5% long-term once at exit on gains above ₹1,25,000. Fund figures are Direct Plan returns from AMFI's NAVs over the same months as our backtest (Oct 2021 → Oct 2026), already net of their expense ratio.
Backtested, not live trading. Past performance is not indicative of future returns. The fixed-deposit line is SBI's 5-to-10-year rate as of September 2026 (6.05%), after tax at a 30% slab — what a deposit pays today, not a five-year history.
500-stock universe
Smallcap 250 + Microcap 250 — India's broadest listed segment. Both constituent lists fetched live from NSE each cycle.
Multi-factor scoring
A proprietary factor blend tuned for small- and microcap behaviour ranks every stock each month. Composition and weighting are MindForge IP.
Equal-weight, sector-capped
Every name carries the same weight; no industry takes more than 2 of the 15 slots. The portfolio stays structurally diversified.
Size it smallest
Fifteen small and micro caps: the least liquid names we hold, and the part of the market a crash hits hardest. Close to the model from ₹15L, and it asks for genuine tolerance for a fall deeper than anything in its backtest.
Full performance analysis
Gross of tax These charts and the month-by-month grid show the model’s own curve, before tax — that is what a backtest produces. Every headline figure on this page is stated after 20% short-term capital-gains tax: 65.4% gross becomes 44.3% after tax.
Left pair: share of all 61 months. Right pair: their own shared scale — the bigger move fills its track and the other draws its true fraction of it.
| Year | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Year | vs index |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2021 | +1.8 | +15.4 | +25.2 | +47.0 | +41.9 | |||||||||
| 2022 | +5.6 | −16.3 | +13.0 | +8.5 | −8.6 | +0.4 | +6.9 | +9.3 | −1.5 | +0.8 | +0.5 | −3.7 | +11.5 | +15.2 |
| 2023 | +0.5 | −9.1 | +1.8 | +8.4 | +12.3 | +10.2 | +19.7 | +11.2 | +5.3 | +7.7 | +14.9 | +3.8 | +124.8 | +76.7 |
| 2024 | +17.7 | +4.7 | −4.2 | +16.4 | +4.5 | +11.5 | +8.7 | +9.9 | +13.9 | −2.3 | +4.4 | +2.1 | +126.7 | +100.3 |
| 2025 | −13.1 | −12.8 | +9.6 | −6.3 | +14.6 | +0.9 | −4.9 | +0.4 | +0.2 | +5.5 | +0.8 | +3.1 | −5.6 | +0.4 |
| 2026 | −10.1 | +8.8 | −7.0 | +20.9 | +8.8 | +13.6 | +0.7 | +14.0 | +7.2 | −2.3 | +63.6 | +63.1 |
Every figure above is computed from the same simulated equity curve as the CAGR on this page — month-end to month-end, model portfolio versus the Nifty Smallcap 250, no costs or slippage assumed. vs index is the calendar-year gap in percentage points. 2021 and 2026 are part years — their totals cover only the months shown. Backtested, not live trading. Past performance is not indicative of future returns.
Choices made on the same history. The number of stocks in each book, the cap of two per industry and the model’s settings were chosen while testing on this same 2021–2026 history. A backtest cannot test a choice that was made by looking at it, which is one more reason to read these figures as an upper bound rather than an expectation. How these are built, and where they flatter us →
Backtest period (all figures after tax): Oct 2021 → Oct 2026 · 61 months · Benchmark: Nifty Smallcap 250 · 44.3% CAGR vs 11.03% benchmark · Sharpe 1.62 · Max drawdown -24.2%. Simulated performance, not live trading. Past performance is not indicative of future returns. This strategy carries significant risk.