Sunday, 2 February 2014

Performance statistics for January 2014

Performance statistics for January 2014 

(For historic performance information and descriptions of what I am trying to achieve with each portfolio please see the 'performance' tab.  As with everything on this site, these are my views only.  Please read the disclaimer to your right and always do your own research.) 

Hedge fund portfolio +0.4%
Net position 14% long, gross book c. 65% utilised

2014 started with...volatility.  Many global markets started with losses and volatility not seen since in 2013.  Whilst I was happy to end the month with a profit, as always, I feel I could have done better. 

Gains were sourced from not only the significant index shorts and long volatility positions but also from certain stock specific names.  Randgold and other gold mining positions were profitable - a trend I anticipate continuing.  Randgold reports its next quarterly update in early February.  Additionally, shares in RSA - the UK insurer - moved forward after a period of volatility after they outlined that recent accounting concerns were just limited to their Irish operation.  Finally names in the US such as Eli Lilly and Tyson Foods pushed up after good quarterly report disclosures.  The position in the latter was halved after this move.  Profits were also taken in some short positions including Canon, Diageo and Boeing.  Reduced size positions are maintained in the latter two. 

Stock specific negatives which impacted performance included a poor update on US trading from the near-luxury retailer Coach.  Emerging market volatility overhung Essar Energy (where the market continues to discount a money raising) as well as Phillip Morris International.  Staples was also down as the market anticipated a poor trading update. 

Volatility in the markets led to a number of position augmentations which had the net impact of slightly pushing up overall exposure.  New positions introduced in the month included BG Group, SABMiller, Altria, AIA Group and Pearson whilst a Hang Seng short index position was also introduced. Additions to the Remy Cointreau position led to it becoming a top five position at the end of the month.

Looking ahead I anticipate a continuation of volatile but opportunistic markets. 

Top 5 longs -
Randgold, RSA, EMC, Timken (pair with SKF), Remy Cointreau

Top 5 shorts -
FTSE100, Euro (vs US Dollar), Dow Jones Industrials, Hang Seng, SKF (pair with Timken)

For the six months period since I started the hedge fund portfolio, performance has been pleasing:

August 2013 +3.8%
September 2013 +4.4%
October 2013 +1.4%
November 2013 +3.1%
December 2013 +3.2%
January 2014 +0.4%
Cumulative +17.4%

I would happily take now an annualised equivalent of this...


Pension fund portfolio -1.6%
Cash position c. 25% (down from c. 33% a month ago)

The third full month of pension fund management, saw a further reduction in the cash position held, as opportunities to embrace individual stock price volatility was apparent.  Positions augmented during the month included Vodafone (after the AT&T bid interest faded away for the time being), Coach (following a disappointing US sales level), plus SABMiller, Tesco and Serco after trading updates that were not taken well by the markets. 

Top 10 positions -
Vodafone, Coach, Tesco, Randgold, SABMiller, RSA, Serco, Syngenta, Eli Lilly, Polymetal

For the three month period since I started the pension fund portfolio, performance has been:

November 2013 -0.2% (cash holding just under 43%)
December 2013 +1.0% (cash holding c. 33%)
January 2014 -1.6% (cash holding c. 25%)
Cumulative -0.8%

A solid start given, for comparative purposes, the FTSE100 (TR) is down 4% over the same period.  The good-sized cash position in January helped but my aim is to significantly outperform the FTSE100 index during 2014.  I have chosen not to use a multi-asset benchmark as I just do not see much medium-term value in fixed income and alternative investments remain broadly unattractive to me - investments such as gold equities are of much more interest to me.

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