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A. Stotz All Weather Alpha Focus – April 2022

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All Weather Alpha Focus was 1.3% above the 60/40 portfolio in April. In the near term, the war in Ukraine is going to rattle markets, and we think Energy and Commodities will do well. We keep Gold as insurance. We expect central banks to do what they can to prop up markets and the Indian stock market to remain strong. Risks: Global recession, crash in the Indian market, collapse in energy prices.

A. Stotz All Weather Alpha Focus is Global, Opportunistic, Long-term, and Defensive:

  • Global – Invests globally, not only Thailand
  • Opportunistic – Tilts towards asset classes, sectors, regions, and themes in a quest to enhance returns and manage risks
  • Long-term – Gains from long-term equity return
  • Defensive – Aims to reduce extreme losses during equity market downturns

All Weather Alpha Focus is available in Thailand through FINNOMENA, and you can learn more here. Please note that this post is not investment advice and should not be seen as recommendations. Also, remember that backtested or past performance is not a reliable indicator of future performance.

Review

 

Performance of the World stock markets

  • NASDAQ in the US was the worst performer in the past month, NYSE was weak too
  • Most Asian markets were down, too, China continued to fall
  • Key European markets fell, but less than US and China

World stocks continued to fall in April

  • All Weather Alpha Focus has a core World Equity allocation
  • Concerns about an economic slowdown, high inflation, and monetary tightening drove down the market

Continued high volatility in Energy

  • We have a tilt to World Energy; up 0.4%, and was the second-best performer in April 2022
  • Geopolitics around the Russia-Ukraine war kept energy prices volatile and high

World Financials has mostly tracked World Equity

  • World Financials fell by 4.6% in April 2022 but outperformed World Equity by 0.9%
  • Recent outperformance, as Financials are a more value-oriented sector

April was bad for Healthcare

  • World Healthcare was down by 6.7% in April
  • We consider Healthcare a defensive sector, and it has performed better than World Equity since our latest revision

Infrastructure fell less than World Equity

  • World Infrastructure was down by 4.7% in April or 0.7% outperformance versus World Equity
  • Stayed resilient relative to the overall market since our March revision

India has been resilient since our last revision

  • India outperformed World Equity by 2.6% in April 2022, and fell by 2.9%
  • As the previous tweet said: “Outperformance in downside is underrated”

Thai money market stayed flat

  • We have a small  allocation to the Thai money market, which was flat as expected
  • The main purpose of our money market allocation is downside protection

Commodities have remained strong

  • We have a tilt to Commodities, which was the best performer in April 2022, up 3.8%

Energy and Agriculture saw a continued rise in prices

  • Energy and Agriculture, which are necessities for survival, drove performance; WTI closed April at $104/bbl
  • Russia and Ukraine are big exporters in both categories, which has disrupted supply

Gold has been flat since the last revision

  • Gold closed April at US$1,896/oz or down by 0.8%
  • Gold has stored value relatively well since our latest revision

Alpha Focus is slightly above the 60/40

Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, expressed or implied is made regarding future performance.

  • Six months in, Alpha Focus closed 0.6% above the 60/40
  • Our three tilts and Gold were helping the strategy to get above the 60/40 in April 2022

Alpha Focus has held up when World Equity has fallen

Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, expressed or implied is made regarding future performance.

  • Six months in, Alpha Focus closed 5.2% above World Equity

Past month: Alpha Focus was 1.3% above the 60/40 portfolio

Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, expressed or implied is made regarding future performance.

  • Alpha Focus was down in April but above 60/40
  • All three of our tilts beat World Equity
  • We increased Gold in our latest revision to have some insurance; slightly down, but 4.7% above World Equity

All Weather Alpha Focus is an exclusive strategy available in Thailand through FINNOMENA, learn more here. 

DISCLAIMER: This content is for information purposes only. It is not intended to be investment advice. Readers should not consider statements made by the author(s) as formal recommendations and should consult their financial advisor before making any investment decisions. While the information provided is believed to be accurate, it may include errors or inaccuracies. The author(s) cannot be held liable for any actions taken as a result of reading this article.

Posted in All Weather Alpha Focus