Another month of the SaaS Index is in the books and it’s time to share August 2018’s performance. This month was a month of consistent growth and outperformance by SaaS. The cumulative return since forming the index in May 2018 has been 18.05%. If you annualize the return of the first 4 months, the index is on pace for returns of 54.15% over 12 months. The Bessemer Cloud Index which is the closest to a true SaaS index outside of ours is already up 50% in 2018 with 4 months left in the year.
August 2018 SaaSy Index Performance: 16.39%
July 2018 SaaSy Index Performance: -1.10%
June 2018 SaaSy Index Performance: 1.73%
May 2018 SaaSy Index Performance: 0.80% (May 11-30th)
Cumulative Return since inception May 11th 2018: 18.05%
Cumulative Benchmark Comparison from inception of the index in August 2018
August was a month of outperformance with the SaaS index. The new highs I predicted last month came to fruition. In the chart below you can see how the trend in SaaS is higher over the long term, but is very volatile from day to day, which means you have to have strong convictions to hold it through the daily and weekly volatility.
August was definitely a bull month for SaaS and hopefully the 2018 vintage is starting to pull away from the comparable indexes.
Here is a heat map of how each of the SaaS stocks contributed to the performance of the index in the month of August 2018.
What a great month! We will see how September turns out. My guess is that we are likely to have a bit of a pullback early in the month after having such a strong finish in August. We are still a month away from the next earnings season, so it will be a few weeks until anticipation begins to build about Q3 results.
The market in general seems to be in a pretty good place for now, and negative news around Italy and tariffs has largely been shrugged off. It’s encouraging to me that pundits in the market are always trying to call the next pullback, correction etc.. and seem to predict it on a regular basis. I think this kind of skepticism helps keep the markets from getting out of hand, but there is always the possibility that things change.
Your SaaS bull!