In the ever-volatile stock market, keeping things simple works surprisingly well, according to Bespoke Investment Group. "Keep it simple, stupid" — sometimes abbreviated as KISS — is a design principle first noted by the U.S. Navy in 1960. Bespoke used Russell 1000 as its stock universe and came up with three criteria: positive price momentum, rising margins and having a moat, or a competitive edge that makes the business somewhat immune to competition.
Lastly, it applies qualitative judgement on whether an individual business has a moat. The portfolio of 20 stocks gained 13.6% over the last three months, compared to the Russell 1000's 8.8% over the same time. The basket also has outperformed the benchmark over the nine-month period since its inception, Bespoke said. Megacap names Nvidia and Meta Platforms can be found on the list.