March witnessed a steady increase in market volatility and stress due to the realization that the coronavirus outbreak was expanding rapidly across the world, forcing massive lockdowns in most of the Developed economies, whose economic consequences will be severe but hardly measurable until the sanitary crisis is contained.
At some point markets got completely dysfunctional. The rapid reaction of Central Banks and Regulators stabilized markets during the second half of the month. Within our Universe, some currency pairs went to the most extreme levels ever.
For the first time ever, one of our sub-strategies, Valuation, hit stop loss (-12,5% at the unlevered version of the strategy) which was duly executed. Our AUD and CAD long positions were the biggest negative contributors.
The movements witnessed in some of our currency pairs have reached unchartered territories in some cases. This being said, as we write this lines, we have recovered circa 13% (27% and 53% in the x2 and x3 versions) from the trough at the middle of March. The good news is that market volatility is most probably here to stay.
We are seeing extraordinary rotation within the portfolio. This means the revaluation potential is extraordinary right now. This is reflected in a portfolio with less risk but bigger rotation, which is already paying.
We expect the environment ahead of us to be very positive for the strategy
Below we show you the October cards of all our funds.
As always we remind you that we are at your disposal for anything you may need.
This document is provided for informational purposes only and cannot be considered in any case as a contractual element, a recommendation, personalized advice or an offer. Nor can it be considered as a substitute for Key Information Document (KID) or any other mandatory legal information that should be consulted prior to any investment decision. In case of discrepancy, the legal information prevails. All this legal information is available at the offices of Grantia Capital SGIIC, SA and on its website: www.grantiacapital.com