Performance statistics for June 2015
(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. A final disclosure, these portfolio are real and are reported to the best of my accounting ability how they actually performed)
Hedge fund portfolio +1.0%
Net position 10% net long, gross book c. 66% utilised (at month end)
At face value little appears to have changed given that my top five longs and shorts are exactly the same as last month.
But there was a lot going on under the surface.
The first aspect was dealing with general monthly volatility. As I detailed here earlier precious few equity markets were positive in June (Brazil and US 'smaller' caps being two exceptions). Without big positive bumps from stocks like Syngenta and Telecity as detailed last month performance had to come from elsewhere. The relatively light net exposure helped (with the individual and index stock shorts being generally extremely helpful) but the additional starts on the long side were Smith & Wesson (analytical love-up piece here) and - unsurprisingly - the long volatility positions in Europe and the US. The former were closed near the end of the month into high volatility but were highly remunerative.
Elsewhere few stories stood out. Agricultural plays like Agco and Deere performed well buoyed by better sentiment to the space (El Nino etc. fears) but this was countered by poor performance by generally poor performance of the gold names Polymetal and New Gold plus even Randgold for once was not helpful. Late in the month I added further to my fledgling South 32 position as the Billiton spin-off seemed to get hit especially hard during the month.
Other positions added to during the month included the Diageo short position (on a - i believe - spurious rumour of a takeover), the Rexam single-sided arbitrage long position and AP Moeller Maersk which I believe fell too far.
Summer markets are likely to remain tricky and hence stock picking acumen/flexibility aligned with some material continuing short positions / limited net exposure is likely to make continuing sense. I may even - at some point - but back all the volatility long positions.
Performance for the first half of 2015 was 16% which I am delighted with.
Top 5 long positions at month end: Voya, Syngenta, Apache, Royal Dutch, NN Group
Top 5 short positions at month end: FTSE-100, Yen (vs US$), Australia index, HK index, Siemens
Pension fund portfolio -4.0%
Cash position c. 4% (6% a month ago)
In my long-only pension fund position there are few places to hide in a falling market and - unlike for the hedge fund noted above - long volatility and short index positions could not come to the rescue.
Nevertheless I am not dis-heartened given that the first half performance was just over 10% (which I am very pleased with) whilst benchmarks like the FTSE-100 were up over the same period only a handful of percent as was - for example - the S&P 500 in the US.
Aside from a handful of specific names such as Smith & Wesson (good - see here) and APR Energy (bad - see here) there were few real specifics to mention other than the broader global markets were down. Fortunately the relatively prudent/broadly mildly conservative approach of the stock picking worked out well.
Transactions undertaken during the month included the sale of APR Energy, trimming the brilliant performing Amazon, swapping out of UBS and adding to HSBC. Also adding to Symantec (noted here), Altria (after this write-up here), and AP Moeller Maersk on weakness and introducing - after this report - a position in Emerson Electric.
Top 10 positions at month end: Apache, Randgold, Agco, Standard Chartered, Tesco, Syngenta, Telecity, Royal Mail, Barclays, Aviva