Below is a summation of the updates
to the portfolio during Q1; the rationale behind these moves was largely
discussed during the most recent Portfolio Update.
- Equities: Positions in JD.com (JD), Liberty Broadband (LBRDK) and Dollar Tree (DLTR) were added.
- Funds: The positions in Advisor Shares Focused Equity (CWS, based off the Crossing Wall Street blog) and Barclays Shiller ETN CAPE (CAPE) were both added in early January.
- Commodities: The portfolio took a position in Uranium (URA).
- China: Our Man added exposure to Chinese A-shares (ASHR).
- International: The international book was the only one that saw some sales, with the position in Petrobras Argentina (PZE) exited (too early) and the position in Pampa Energie (PAM) was trimmed in early January.
Performance and Review
For the 1st quarter, the portfolio returned a very healthy 950bps, continuing the good recent trend. Markets were also largely positive for the quarter, with the S&P 500 TR (6.07%) and the MSCI World (+6.53%) both posting healthy returns.
The performance was driven by the International/Country book (+645bps), in particular by the exposure to Argentina (+505bps) with names benefitting from positive sentiment following continued Macri reforms. In January, Macri removed a rule that required investments remain in Argentina for 120days, a move that further enhances the probability of Argentina getting included in the MSCI Emerging Market indices. Further signs of interest in Argentina were visible, with Blackrock filing with the SEC in February to launch a US-listed Argentina ETF. For the portfolio, within Pampa Energie was the primary driver of Argentina’s contribution with the company also benefiting after issuing a US-dollar bond.
The Equities book (+213bps) was a good contributor during the month with a number of names contributing; VIPS/JD (+142bps) benefited from the reduced tensions & increased confidence around China, while both LBRDK (+48bps) and IBB (+44bps) rose with the markets. The Technical book (+164bps) is fully invested and thus also benefited from the rising markets. The Funds book (+67bps) performed solidly, with all of the positions contributing and marginally outperforming the markets over the period.
The non-Equity books failed to contribute during the quarter. The China book (+6bps) broke-even with positive contribution from Chinese A-shares being offset by the strength of the Australian Dollar. The Commodities book (-18bps) posted a small negative contribution, while the Currencies book (-127bps) was the sole negative contributor of size, suffering as the US Dollar weakened against the Euro and in particular the Japanese Yen.
Portfolio (as at 3/31 - all delta and leverage adjusted, as appropriate)
22.7% - Technical (DDM, QLD and SSO)
20.1% - International (Brazil, Italy and Argentina)
19.3% - Equities (JD, VIPS, DLTR, LBRDK, FNMA and IBB)
9.9% - Funds (CWS, GVAL, and CAPE)
2.9% - Commodities (URA)
2.3% - China-Related Thesis (CROC – Short Australian Dollar, ASHR)
-46.3% - Currencies (EUO – Short Euro, and YCS – Short Japan)
9.1% - Cash
Disclaimer: Nothing above represents a recommendation in any way, shape or form so please don’t even think of trying to take the above that way. For added clarity, while Our Man is invested in all of the securities mentioned that’s a terrible reason for anyone else to do so. Our Man 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 given your own circumstances/risk tolerance/etc.
- Equities: Positions in JD.com (JD), Liberty Broadband (LBRDK) and Dollar Tree (DLTR) were added.
- Funds: The positions in Advisor Shares Focused Equity (CWS, based off the Crossing Wall Street blog) and Barclays Shiller ETN CAPE (CAPE) were both added in early January.
- Commodities: The portfolio took a position in Uranium (URA).
- China: Our Man added exposure to Chinese A-shares (ASHR).
- International: The international book was the only one that saw some sales, with the position in Petrobras Argentina (PZE) exited (too early) and the position in Pampa Energie (PAM) was trimmed in early January.
Performance and Review
For the 1st quarter, the portfolio returned a very healthy 950bps, continuing the good recent trend. Markets were also largely positive for the quarter, with the S&P 500 TR (6.07%) and the MSCI World (+6.53%) both posting healthy returns.
The performance was driven by the International/Country book (+645bps), in particular by the exposure to Argentina (+505bps) with names benefitting from positive sentiment following continued Macri reforms. In January, Macri removed a rule that required investments remain in Argentina for 120days, a move that further enhances the probability of Argentina getting included in the MSCI Emerging Market indices. Further signs of interest in Argentina were visible, with Blackrock filing with the SEC in February to launch a US-listed Argentina ETF. For the portfolio, within Pampa Energie was the primary driver of Argentina’s contribution with the company also benefiting after issuing a US-dollar bond.
The Equities book (+213bps) was a good contributor during the month with a number of names contributing; VIPS/JD (+142bps) benefited from the reduced tensions & increased confidence around China, while both LBRDK (+48bps) and IBB (+44bps) rose with the markets. The Technical book (+164bps) is fully invested and thus also benefited from the rising markets. The Funds book (+67bps) performed solidly, with all of the positions contributing and marginally outperforming the markets over the period.
The non-Equity books failed to contribute during the quarter. The China book (+6bps) broke-even with positive contribution from Chinese A-shares being offset by the strength of the Australian Dollar. The Commodities book (-18bps) posted a small negative contribution, while the Currencies book (-127bps) was the sole negative contributor of size, suffering as the US Dollar weakened against the Euro and in particular the Japanese Yen.
Portfolio (as at 3/31 - all delta and leverage adjusted, as appropriate)
22.7% - Technical (DDM, QLD and SSO)
20.1% - International (Brazil, Italy and Argentina)
19.3% - Equities (JD, VIPS, DLTR, LBRDK, FNMA and IBB)
9.9% - Funds (CWS, GVAL, and CAPE)
2.9% - Commodities (URA)
2.3% - China-Related Thesis (CROC – Short Australian Dollar, ASHR)
-46.3% - Currencies (EUO – Short Euro, and YCS – Short Japan)
9.1% - Cash
Disclaimer: Nothing above represents a recommendation in any way, shape or form so please don’t even think of trying to take the above that way. For added clarity, while Our Man is invested in all of the securities mentioned that’s a terrible reason for anyone else to do so. Our Man 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 given your own circumstances/risk tolerance/etc.
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