April 2015 Review

Portfolio Update  
- Our Man had to reduce the size of the portfolio at month-end (pesky kids…) and given that all positions were going to be impacted, he used the opportunity to reshape the portfolio slightly based on his current conviction levels.  These changes, and some subsequent ones, will be the subject of a separate blog post.

Performance Review  
The portfolio was down 1.79% for the month of April, which put the year-to-date performance of +6.6%.

The portfolio’s exposure to the US Dollar proved the largest negative contributor for the month with the China Thesis (-77bps) and the Currencies book (-114bps) hurt by the fall in the US Dollar against the Australian Dollar and Euro respectively.  Both of these books were substantially reduced in size during the month, though Our Man expects that this will likely be reversed at some point within the next 12 months as his expectations and targets for the Australian Dollar and Euro are substantially lower than their current rates against he US Dollar.  The Dollar’s weakness, saw the hint of some strength in Gold, which Our Man benefited from through his exposure to Gold Miners in the Precious Metals (+27bps) book.

The overall exposure to equities was a slightly negative contributor for the month.  The Equities book (-98bps) fell with TTM, RDY and TWTR (which had disappointing numbers/guidance) being the primary contributors.  The  Energy Efficiency book (-3bps) had a small impact.  The strong performance of the European markets helped the International/Country book (+58bps) have a strong month, though uncertainty remains regarding Greece’s place within the Euro.  Finally the Technical book (+28bps) benefited from the rise in the US markets.

Portfolio (as at 5/1 - all delta and leverage adjusted, as appropriate) 
32.0% - Technical Book (DDM, QLD and SSO)
29.4% - International/Country (EWI/EWP/GREK in Europe, GVAL, and Argentinian names)
22.3% - Equities (RDY, TTM, TWTR & VIPS) 
4.6% - Precious Metals (GDX)
0.0% - Energy Efficiency (AXPW, and XIDE) 
 
-5.5% - China-Related Thesis (CROC – Short Australian Dollar) 
-15.7% - Currencies (EUO – Short Euro, YCS – Short Japanese Yen)

17.1% - 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.