The best month in history for many stock indices, driven by advances in the development of some vaccines. The sectors that were hardest hit during the Covid-19 crisis were obviously those that performed best.
Many indices reached new relative highs since the rebound we have seen after the March lows. The reaction to the vaccine news was certainly dramatic.
Meanwhile, Biden won the US election, which was also celebrated in the stock markets, while Trump has yet to concede victory. In currency markets we have witnessed a continued appreciation of the cyclical currencies within our universe, primarily the NZD, and a steady devaluation of the USD.
Meanwhile, bankruptcies are on the rise, recent confinements will mean negative Q4 GDP for many countries, bond yields are rising slightly and real interest rates have declined slightly. Some parts of the market discount that there will be more inflation, but others do not.
We expect more volatility in the future.
November was a negative month for the portfolio, as it remains defensively positioned.
We continue to see a very decent turnover within the portfolio, which has meant more than 1.7% profit contribution from closed trades. Some of the currency pairs we hold moved against us over 5% during the month. This means that the current information ratios are extraordinarily good on several crosses.
At the portfolio level, we saw a decrease in the short CHF position, which gradually rotated to short NZD and AUD. The USD remains the largest long exposure, while we have seen a decent rotation during the month in currencies such as GBP, CAD and JPY.
Currently, all 28 pairs in the universe show combinations with good annualized expected returns. This means that the potential return is substantial while maintaining a diversified portfolio.
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