March 2013 Review

Portfolio Update 

There were no changes to the portfolio in March.

Performance Review  

March was the portfolio’s first positive month of the year (+0.39%), though performance for the year remains negative (-2.4%). 

The Bond/Absolute Return Funds (+4bps) were a small contributor, but unlike previous years their performance has been a non-entity so far in 2013.  It was a pleasant surprise, given Our Man’s bullish view on the US Dollar, that both the Currencies book (+28bps) and the Precious Metals book (+7bps) were positive on the month; though given the continued troubles in the Euro-area with the messy bail-out (and bail-in) in Cyprus largely explained how both the Dollar (vs. Euro) and Gold were up in the month.

The Puts/Hedges book (-9bps) was a small detractor from performance as the market or more specifically, Consumer Staples and Industrials companies in the US, and German companies in Europe continued to rise.  The NCAV book (+17bps) continued to add to performance, though the book makes up a very small portion of capital.

The 3 main equity books were mixed during the month, and despite the rise in the equity markets in Q1 they are all down for the year.  The Other Equities book (-32bps) fell during March, as the positions in Italy and especially Greece suffered from the continued troubles in Europe.  The Energy Book (-0bps) was flat for the month and the Value Equities book (+23bps) merely recouped last month’s losses.

Portfolio (as at 3/31 - all delta and leverage adjusted, as appropriate) 

20.0% - Bond/Absolute Return Funds (DLTNX and HSTRX) 

7.1% - Precious Metals (GLD) 

5.9% - Value Idea Equities (THRX, and DRWI) 

2.9% - Other Equities (GREK, and EWI)  

2.3% - Energy Efficiency (AXPW, and XIDE) 

2.0% - NCAV Equities

-0.0% - China-Related Thesis (no positions) 

-2.0% - Hedges/Put Options (premium of 8bps in XLP Jan-14 puts, 27bps in XLB Jan-14 puts and 15bps in EWG Jan-14 puts) 

-16.3% - Currencies (EUO – Short Euro)

50.8% - Cash 

Disclaimer:  For added clarity, Our Man is invested in all of the securities mentioned.  He also holds some cash and a few other securities (of negligible value).  You should not buy any of these securities because Our Man has mentioned them, but should do your own work and decide what’s best for you.