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Discover the industry's "best ideas" by examining four indices crafted to reveal top hedge fund holdings: Conviction, Crowdedness, Concentration, and Consensus.

Data Source: 
13F
Update Frequency: 
Quarterly
Novus 4C Indices

Conviction -- the good kind

July 13, 2021

The premier Novus 4C index, Conviction, focuses on how much of their capital a fund manager is willing to bet on one stock. High-conviction stocks tend to be in Communication Services or Information Technology, including the best performers: Sea Ltd. (NYSE:SE), PayPal (Nasdaq:PYPL) and Alphabet (Nasdaq:GOOG).

Over the past two decades, the Novus Conviction Index has far exceeded U.S. and world stocks, and this outperformance is reflected in its reward-to-variability metrics. Regardless of how you measure risk-adjusted returns, Novus Conviction will impress with a Sharpe ratio of 0.40 compared to the MSCI World Index Fund's 0.27 and a gaudy Sortino ratio of 0.74 compared to MSCI's 0.41.