Systema Ledger | October 2026 Portfolio Report

Welcome to Systema Ledger, my monthly report on how my own account is doing. This is the October 2026 edition.

Everything here is in percentages. I don’t show amounts, and I don’t name any stocks.

This is my account’s performance, shared for information only. It’s not investment advice, and past results don’t predict future ones.

A reminder on how to read the numbers: money I add or withdraw isn’t counted as a gain or a loss, so every figure shows how the investments themselves did.

Account vs Nifty 500

October was a month the account lost more than the market. The account fell 2.0%, while the Nifty 500 fell 0.8%.

Since I started in September last year, the account is up 4.5%, against a fall of 3.6% for the Nifty 500. For the financial year so far, since April, the account is up 9.1%, against 6.7% for the market.

The month’s shape matters more than its total. From the middle of October the account slid for six trading days in a row, through the week the market turned Risk Off. By 23 October it was 11.7% below its high, the deepest fall since I started. Then it won back about half of that in the last week, as the market bounced.

So the account ended October 6.1% below its peak, with the largest fall from a peak now at 11.7%.

Where the return came from

Where the return came from: each part’s share of the account’s return. October: momentum stocks −0.67%, hedge −0.17%, options income −1.05%, earlier holdings −0.01%, account costs −0.09%. Since inception: momentum stocks +2.45%, hedge +1.57%, options income −3.60%, earlier holdings +4.61%, account costs −0.51%.

Each bar is how much that part of the account added or took away. Add them up and you get the account’s total.

This month every part was slightly negative, and the biggest drag was options income, which took 1.05% off the account. The momentum stocks cost 0.67%, the hedge 0.17%, and account costs 0.09%.

Since the start, the earlier holdings have contributed the most, 4.6%. The momentum stocks have added 2.5% and the hedge 1.6%. Options income is now down 3.6% over the whole period. I’ll keep reporting it either way.

Momentum book

Momentum book returns for October and since going live. Momentum book, hedged: −0.9% in October, +4.7% since live. Unhedged: −0.7%, +3.1%. Nifty 500: −0.8%, −6.2%. Nifty 500 Momentum 50: −2.4%, −3.7%. Largest sector: Capital Goods, 26% of the book. Size: 45% mid, 51% small. Best five positions: 85% of this month’s gains.

Now the momentum stocks on their own. In October they fell 0.7% before the hedge, close to the Nifty 500’s 0.8%. They did better than the Nifty 500 Momentum 50 index, which fell 2.4%, and much better than mid and small companies as a whole, which fell 4.5%.

Since going live on 13 July, the stock book is up 4.7% including the hedge, and 3.1% without it. Over the same time, the Nifty 500 fell 6.2% and the Momentum 50 index fell 3.7%.

Being in mid and small companies has cost 2.4% since going live, because that part of the market fell further than the broad market. Picking within them has added 11.6%.

The 1 October rebuild changed the book’s mix. Capital goods is still the largest sector, but it fell from 39% to 26% of the book. Financial services rose to 21%, and automobiles to 16%. By size, 45% is in mid-sized companies and 51% in small ones.

The best five positions made 85% of this month’s gains.

What the system did · rule scorecard

What the system did and the rule scorecard. Reselection on 1 October: 13 kept, 7 replaced, turnover 48%. Points of return for October, the quarter and since 1 April. Monthly tilt vs no tilt: 0.0%, 0.0%, +1.1%. Smoothness screen vs plain momentum: +4.6%, +4.6%, +2.2%. Smooth momentum vs jumpy momentum: +5.0%, +5.0%, +6.9%. Tilt hit rate: 3 of 4 in the model, 1 of 2 in the account.

October started a new quarter, so on 1 October the system rebuilt the stock list from scratch instead of doing the usual monthly tilt. 13 stocks were kept and 7 replaced, and about half the book changed hands.

The rule scorecard tests each rule by running the same portfolio without it, with the same data, the same start and the same costs. These are model portfolios, tracked since 1 April.

The monthly tilt shows 0.0% for October because there was no tilt this month. Since April it has added 1.1%.

The smoothness screen had a strong month. The system prefers stocks that rose steadily over stocks that simply rose the most, and in October that choice was worth 4.6%. Since April it’s now ahead by 2.2%, after trailing at the end of September.

Steady risers also beat the jumpy ones the screen turned away, by 5.0% this month and 6.9% since April.

The tilt hit rate hasn’t changed, since there was no tilt in October: in the model, the stocks added to beat the stocks cut 3 times out of 4; in the real account, 1 time out of 2.

Hedge · options income · costs

Hedge, options income and costs for October. Hedge result: −0.2% of the book, coverage 0%. Options income: −1.1% of the account; 64% of positions made money. Charges: 0.34% of the account; turnover 69% since live. Protection check: on the book’s five worst days the hedge offset 6% of the loss.

The hedge cost 0.2% of the stock book in October; since going live it’s still up 1.5%. On the stock book’s five worst days, it made back 6% of what the stocks lost. No protection was open at the end of the month, so the coverage reads 0%.

Options income lost 1.1% of the account in October, and its worst single day cost 1.13%. Counting every options position I’ve closed since the start, 64% made money, but the average loss is about twice the average win.

All charges this month came to 0.34% of the account, up from 0.27% in September; the 1 October rebuild meant more stock trading. Since going live, I’ve traded about 69% of the stock book, not counting the first purchases.

Notes

In October we see that momentum stocks slipped, losing their edge over the broader market by a small margin. Overall it was a choppy market. The hedge went well in terms of trades. But I can see that it does not fully correlate with my portfolio as I use Nifty options to hedge, while my current portfolio system takes into account the broader market. Thus, this makes me think of trying MidCap for a closer correlation. One issue I have with MidCap options is the lack of liquidity and absence of weekly expiries. Directional options selling is hard overall due to the choppy, volatile and violent market.

As always, I don’t name any stocks. The book is run by fixed rules, and a list of names would read as a recommendation, which this isn’t. By the time you read this, the book may already hold different stocks.

Summary

October was a difficult month. The account fell 2.0% against the market’s 0.8%, after sliding 11.7% below its high by 23 October and winning back about half of that in the last week. Options income was the main drag, while the momentum stocks roughly kept pace with the market and beat the momentum index.

Since the start, the account is up 4.5% while the market is down 3.6%.

Next month’s report will cover November, including the rebalance on 2 November.

Thanks for reading. This is my own account’s performance, shared for information only. It’s not investment advice, and past results don’t predict future ones.

Zerodha Console portfolio performance curve, 2 September 2025 to 31 October 2026, both lines starting at 1,000. Equity NAV 1,054.15, up 5.41% since 2 September 2025; Nifty 500 963.73, down 3.63%.

For an independent view, this is Zerodha’s own performance curve for my account over the same period. Zerodha calculates it with its own method, so its figure, up 5.41%, is a little different from the 4.5% in this report. Both leave out money added or withdrawn, and both put the Nifty 500 at minus 3.6%.

Referral link. *T&Cs apply. Investment in securities market are subject to market risks, read all the related documents carefully before investing. For a detailed disclaimer visit https://zerodha.com/pricing. Member ID NSE (13906), BSE (6498), MCX (46025). Brokerage will not exceed the SEBI prescribed limit.