QVGS GrowthMode

Construction

The GrowthMode Indicator is constructed using Fundamental, Quantitative, and Technical inputs. The indicator is computed every month and classifies Indices and stocks into 2 Modes at a point in time by ascribing a score of 0 or 1 as follows:

Expansion (1) | Contraction (0)

Along with the Bias for the past 13 months of the Index, the GrowthMode indicator can be applied in 2 ways:

1. Passive Growth
2. Active Growth

Application

The GrowthMode indicator is useful for medium-term investing.

Broad-based Indices or Stocks experiencing positive underlying growth and momentum are in Expansion mode and indicate a long position to be taken. Conversely, Indices or Stocks facing stagnation or degrowth are classified in the Contraction mode and can be exited or shorted.

The Bias adds context to the GrowthMode indicator by indicating the possibility of continued momentum or mean reversion.

The detailed construction and interpretation notes of QVGS GrowthMode can be understood through the link below.

Passive Growth is computed on broad market indices – the NIFTY 500 for Indian Equities and the S&P 500 for U.S. Equities as below:

• A signal of 1 implies Expansion.
• A signal of 0 implies Contraction.
• The trendline describes the bias of the index over the past 13 months.

Active Growth is computed on the stocks comprising the board market indices and represented as the percentage of stocks in each bucket for the NIFTY 500 constituents for Indian Equities and the S&P 500 constituents for U.S. Equities as below:

• The red bucket implies Contraction.
• The Green / Blue bucket implies Expansion.
• The trendline describes the bias of the index over the past 13 months.