Backtesting of the icTracker v/s major world indices

The icTracker is a ground breaking Intellectual Capital tracking tool. In using Intellectual Capital to explain the difference between the market price and book value of a stock, it seeks to quantify the value of intangibles in the business that the market has already factored into its pricing calculations for the stock. However we wanted to be absolutely sure. Hence we asked the following questions of icTracker :

  • Does the intrinsic stock price that icTracker calculates, mirror the actual market price of the stock?
  • Can recommendations from the icTracker be used by a fund manager as the basis for actually investing in the stock market?
The only way to answer these questions definitively and set at rest all doubts about the effectiveness of the icTracker was to Backtest its recommendations. And this is exactly what we did.

Backtesting methodology

The icTracker calculates the intrinsic value of stocks it tracks every quarter, as soon as their financial results are declared. Hence to back-test the icTracker, we created a portfolio based on the recommendations from icTracker starting ten years ago, and thereafter rebalanced this portfolio every quarter depending on the new recommendations from icTracker for the quarter. We selected the leading Bluechip and Broad market indices as our benchmarks. Our goal was to establish that an icTracker based portfolio outperforms every benchmark index over the long term.

We started with 100,000 in local currency and conducted our trades in the middle of the quarter, in order to budget sufficient time for all results from the previous quarter to be announced. We also factored in brokerage charges of 0.1% per transaction and included the impact of corporate actions on active stocks in our folio. Here are the results.

icTracker Backtesting results
CountryIndex typePerformance of icTracker v/sStart DateEnd DateIndex CAGRicTracker CAGR
IndiaBluechipBSE SENSEX30 Sep 201430 Sep 202411.04%35.38%
Nifty 5030 Sep 201430 Sep 202411.20%
Broader MarketBSE 20030 Sep 201430 Sep 202412.52%
Nifty 50030 Sep 201430 Sep 202412.87%
MidcapNifty Midcap 5030 Sep 201430 Sep 202416.68%
United StatesBluechipDJ Industrial Avg30 Sep 201430 Sep 20249.50%13.41%
Broader MarketNYSE US 10030 Sep 201430 Sep 20247.18%
DJ Composite Avg30 Sep 201430 Sep 20248.18%
SnP 50030 Sep 201430 Sep 202411.29%

These results provide conclusive evidence that an icTracker based portfolio has outperformed every major stock market index over the long term.

If you have any questions about the icTracker backtesting, have a comment or otherwise want to provide feedback, please Contact Us.

Standard Disclaimer

  1. Registration granted by SEBI, membership of BASL and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors.
  2. Past performance, by way of backtesting or by way of actuals, is no guarantee of future returms.
  3. Securities mentioned on this website are for educational purpose only and do not constitute investment advice.
Standard Warning - Investment in securities markets are subject to market risk. Read all the related documents carefully before investing.