July 2026 MSMqi Monthly Update: MSMqi 2025 Index Falls 3.00%; CAGR Still At 34%

For the most up-to-date performance, visit the full index dashboard here. To see all of our return updates, go here.

Coming off a strong June, July was a weaker month for our Microcap Quality Indexes (MSMqi). The MSMqi 2025 Index fell 3.00%, giving it a CAGR 34.35%, while the MSMqi 2022 Index declined 7.16%, putting it at a CAGR 19.25%. It’s important to note that all of our indexes follow a passive strategy. Our goal is to show you that great stocks can perform well for a long period of time.

The broader market also had a difficult month. The Nasdaq fell 3.20%, SPY declined 6.19%, but surprisingly, the iShares Micro-Cap ETF (IWC) was nearly flat, gaining 0.03%.

Despite the weaker month overall, several stocks stood out:

• $DCMDF (TSX:DCM) (marketing communications): +65.83%
  DCMDF was the strongest performer among the major contributors, gaining 65.83% in July. The move followed DCM’s $54 million acquisition of Octacom, which expands the company’s exposure to AI-enabled document processing, workflow automation and other technology-driven services. The company also announced a new intelligent document-processing win with a Canadian bank later in the month.

• $MFCO (electronic filters): +44.62%
  MFCO gained 44.62% in July. The company operates in the RF and microwave communications space, with applications across defense, radar, satellite communications and wireless infrastructure. The strong performance may have been supported by continued interest in defense and communications-related businesses, as well as the company’s exposure to these areas. MFCO was our newest addition to the MSMqi. It’s nice to see that it’s already performing well. You can view our Cliff Note research report here.
  

• $HMFAF (TSX:HMM-A) (electrical enclosures): +40.43%
  HMFAF advanced 40.43% in July, helped by strong second-quarter results released late in the month. The results reinforced the company’s strong operating momentum and came as Hammond continued to expand its manufacturing capacity to support demand across its North American markets.

In July, we added the 16th stock to The MSMqi Spotlight Index - high-conviction names selected from across the main 2022 and 2025 MSMqi Indexes. Each Spotlight is selected with the potential for at least 50% near-term upside, while also offering the possibility of becoming a long-term multibagger. The Spotlight Index was launched in April 2024.

As of the end of July, the Spotlight Index had delivered an average return of 74.82%, with an average peak return of 140.71% across all stocks. Ten stocks (63%) have reached the 50% short-term hurdle, while five have achieved multibagger status.

The MSMqi 2022, is our inaugural index launched in February 2022.

The MSMqi 2025 was the result of the April 2025 rebalancing of the MSMqi 2022, which involved the removal of 23 stocks. These removed stocks are up 38.10% since they were removed. You can still track them here.

Year to date, the MSMqi 2025 is up 17.38%, while the MSMqi 2022 is up 13.92%. Over the same period, the Nasdaq has advanced 9.17%, SPY has risen 9.85%, and IWC is up 19.17%.

Our Microcap Quality Index Platform (MSMqi) is based on a passive strategy built to give smaller-cap investors a fertile multibagger hunting ground. At the end of July, the platform tracked 147 unique stocks across its indices and has now produced 78 multibaggers in total, representing a 53% hit rate.

See Full Performance Report Below and all the Spotlight stocks.