A. Stotz All Weather Alpha Focus – May 2022

All Weather Alpha Focus was 1.3% above the 60/40 portfolio in May. The war in Ukraine is going to continue to rattle markets, and we think World Energy and Commodities will do well, which is reflected in our tilts. We expect 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

World stocks are down 5% since the last revision

• All Weather Alpha Focus has a core World Equity allocation, up by 0.3% in May 2022
• The market appears to expect inflation to be about to peak and that rate hikes will be less aggressive

World Energy reached new heights

• We had a tilt to World Energy; up 13.1%, and was the best performer in May 2022
• Geopolitics around the Russia-Ukraine war pushed energy prices further

World Financials has mostly tracked World Equity but been more resilient

• World Financials was up by 0.5% in May 2022

Healthcare hasn’t been that defensive

• We had a small allocation to World Healthcare, which was down by 2.5% in May
• We consider Healthcare a defensive sector, but it has performed just better than World Equity since our latest revision

Infrastructure has been resilient relative to the overall market since our March revision

• We also had a small allocation to World Infrastructure, which was up by 1.7% in May or 1.4% outperformance versus World Equity

India has been fairly resilient since our last revision

• We had a tilt to India, which underperformed World Equity by 4.3% in May, and fell by 4.0%

Thai money market stayed flat

• Rather than Global Bonds, we had a small target 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 had a tilt to Commodities, which was the second-best performer in May 2022, up 3.4%

Energy saw a continued rise

• As mentioned, Energy prices rose based on geopolitical events related to the war in Ukraine
• WTI oil closed May 2022 at $115/bbl

Gold has returned in line with World Equity since our last revision

• Gold closed May 2022 at US$1,837/oz or down by 3.4%

May 2022: Alpha Focus was 1.3% above the 60/40 portfolio

• Alpha Focus was also 1.3% above World Equity
• Our tilts to World Energy and Commodities were the main drivers of the May 2022 performance

Alpha Focus is above the 60/40

Alpha Focus has held up when World Equity has fallen

• Alpha Focus closed May 2022 7.7% above World Equity

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

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