Investment Solutions


Investment Solutions


Investment Solutions


Quarterly Rebalance: SW Top 10 Continues Outperformance


Monday, April 15, 2019

Monday, April 15, 2019

The index is rebalanced quarterly and we've not taken a look at the index since the October rebalance. What happened in 6 months time? Using the ASX200 as a benchmark, how has the community most popular index performed?

The index is rebalanced quarterly and we've not taken a look at the index since the October rebalance. What happened in 6 months time? Using the ASX200 as a benchmark, how has the community most popular index performed?

The SW Top 10 Members' is an index comprised of the top 20 stocks, held by the top 10 best performing portfolios. That the top 10 of over 60,000 portfolios! Needless to say, to be in the top 10 you've got to be a consistent performer.

The index is rebalanced quarterly and we've not taken a look at the index since the October rebalance. What happened in 6 months time? Using the ASX200 as a benchmark, how has the community most popular index performed?

How Does an Investor Make It Into the Top 10?

The question that everyone always asks. The WealthCheck score is Selfwealth proprietary measurement used to rank an investor against the Community. It takes into account:

  1. An investor time-weighted performance over a 12-month period, which itself is broken down further into different periods and is compared to the rest of the community. This counts for 50% of the score.

  2. Next, we look at the diversity of their portfolio, which is 40% of the WealtCheck score.

  3. Then the final 10% is made up by a Refinitiv (previously Thomson Reuters) valuation of the portfolio.

The WealthCheck is then represented as a letter, starting from A+ and bottoming out at F. Note that you can be a high performer, but have a low WealthCheck score, due to your performance coming from one stock. A portfolio like this would not make it into the top 20 performers.

But Aren't You Just Chasing a Bolted Horse?

This is the biggest criticism received of the community portfolios, which is based on the phenomena of the Wisdom of the Crowd. The criticism states that the performance of individuals is based on historical performance and the value has already been taken from the rise of that stock. I.e. The system picks stocks that have performed well in the past and have run their course!

This is why we use a variety of time periods, not just 6 months or 30 days, combined with diversity and valuation of stocks, to pick the best investors not the best stocks. Once we find the best investors, the system pulls out the stocks they hold and equally weights them into the index you find here.

At the end of the day, this index along with many others in the Selfwealth platform has years of data behind them and over long periods have shown outperformance. The numbers talk for themselves.

How Does This Index Perform?

As of 16th April, this index has outperformed the market (the ASX200) by 593 basis points over the past two years, or 5.93% on top of what the ASX200 has done. Annualised over a four year period, the index performance is 10.32%.

If you're a Selfwealth Member you can rebalance your portfolio to an index like this after a few clicks all buy and sell trades are placed for you to match the target! Remember, you'll never pay more than $9.50 per trade at Selfwealth.

What in the Index?

Without further ado, see below for the top 20 stocks equally weighted, held by the top 10 investors. Note: the coloured dots represent overvaluation (red), fair valuation (yellow), undervaluation (green) or no valuation given (black) by Refinitiv as at 16th April 2019.

APT Still There...

We received plenty of comments in regards to AfterPay (ASX:APT) being included in the October balance. Why would you take on APT, it already run its course! If you had have bought it then when the rebalance suggested and retained it through to now you would have had a 28.75% gain.

ETFs Still a Strong Presence

Vanguard ETFs alone now make up 25% of the target portfolio. The major additions have an external focus “ US, global and Asia (ex-Japan). Is the community buying into the conversation that a recession is coming to Australia soon? All ETFs combine to make up 40% of the list.

Selfwealth is planning on launching its own ETF this year. Want to keep up-to-date on its progression? Check out and enter your details.

One Big Resource Out, Three Smaller Ones In?

Rio has dropped off the top 20 list, with three relatively smaller resource companies making a first-time entrance, in the likes of Carnarvon (ASX:CVN), Fortescue Metals (ASX:FMG) and Iluka Resources (ASX:ILU).

The Big Outs (Compared to October)

The big ones? Three of the big four ones? Only NAB has survived the purge, with Macquarie being the other main company representing banking. Of course, the banks are represented indirectly via the ETFs, though.

REA Group is out (from the December rebalance) after being included for a few rebalances in a row last calendar year. Is the community unsure about REA's growth in the face of a housing market decline and fewer listings, and favouring other companies in its place?

Sydney Airport is also a noticeable out, despite it being deemed as undervalued by Refinitiv. On a similar trend to REA Group, are the top investors considering there to be less travel, or more importantly, fewer overseas airlines paying their shelf space at the airport?

How Do I Access This Index?

Simply create a Selfwealth account and sign up to Premium “ you get three months for free upon sign up. It then $20 per month, which also gives you unlimited Refinitiv articles, live pricing on the stock analysis page as well as free market depth. Want to follow this index? We've got a mechanism called target portfolio' that lets you align your portfolio to this index with a few clicks.

Any questions or if you need help with your account, get in touch at or on live chat during business hours.

If you've already got an account, you can view all Selfwealth indexes via the left-hand side menu once logged in, by clicking Members > Index.

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