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Skating well on January ice

Our January '21 Performance

Global Funds' Performance: January '21

The First Global Global Freedom Fund - Global Tactical Strategies (FG GFF-GTS) is up 1.3% 

Our Global Portfolio product, the GMAAP is up 2.7%

Vs 

MSCI ACWI Index that is down 0.4%

Global Funds' Performance: Calendar 2020 

FG GFF-GTS (US Dollar terms) was up 36.0%

GMAAP (US Dollar terms) was up 35.8%

Vs

MSCI ACWI Index that was up 14.3%

Our performance came with relatively low volatility.

Annualised volatility was around 22% for our products in the turbulent year, 2020, versus 30% for the MSCI ACWI Index and 37% for the S&P 500!

India PMS Performance: January '21

The Pure Equity India Super 50 (IS50) is flat

While NSE 500 is down 1.9%

The Asset Allocation India Multi Asset Allocation Portfolio (IMAAP) is down 0.9%

And CRISIL Moderate Hybrid Index (our benchmark for IMAAP) is down 0.5%

India PMS Performance: Calendar 2020

The IS50 is up 31.1%

Vs

NIFTY 50 that is up 15.4%

NIFTY 500 that is up 15.6%

The IMAAP is up 16.5%

Vs

CRISIL Moderate Hybrid Index that was up 15.0%

In 2020, the volatility for IS50 was 19% as against 33% for the NSE 500 and nearly 35% for the Nifty. The volatility for the IMAAP was a mere 10.5% against 16.2% for the CRISIL Moderate Hybrid Index.

Skating well on January ice

What we saw in January was something that has been in the works for the past several months: A general souring of mood. An onset of fatigue. A frenzy of speculation.

A quick look at the Tech heavyweights, from August-September 2020, shows the general lethargy in large cap tech: most, barring Apple, have done nothing since then.

The action shifted to the second and third tier tech names. With some eye-popping returns coming through in the last 2-3 months.

While we have participated in some of the excesses (it is perfectly okay to participate in bubbles. As long as you do not start believing in them!), we have done so with great care and scepticism.

Being wide eyed believers is something that is simply not us.

Therefore from September, we have generally been good boys, and have been careful not to lose money even if it has meant sacrificing some speculative upside.

In line with that general stance, in January, we kept our capital intact in markets that lost capital for people, broadly speaking.

Of course, we would be failing in our duty if we didn't highlight our "Out of the park Winner of the month": Macerich, a REIT. Yes, you read that right. A REIT that doubled in value in a month!

More on this down here.

Global Performance Analysis

Our positioning in our Global Fund and Segregated Managed Accounts-PMS remained largely what it has been over the last few months. Emerging Markets dominate, US is now around 28% weight.

Fixed Income and REITs occupy the largest weight in our allocations, in the past 8 months.

We had some great winners in January.

For example, Macerich: this featured in the hallowed list of "short squeezed" stocks: it's a REIT, paying regular dividend, yielding 7%, and yet, these idiot hedgies were shorting the hell out of it. Serves them right. We gratefully accepted tech-stock returns from our lowly REIT, and exited (+80%).

Others on our January Honor roll were: Bitcoin (MSTR +60%), Palantir (+50%), Jumia Tech (+39%), Tencent (+21%), Meituan Dianpi (+21%), Upwork (+20%), Ganfeng Lithium (+18%), ROKU (+17%) & Hong Kong Stock Exchange (+17%).

Our global spread, across markets and asset classes, helped cushion the creeping ugliness in the NASDAQ.

Added to this global spread, was a layer of Portfolio Insurance, via our TIPP Tech: Tactical Insurance for Portfolio Protection Strategy.

We have had these protections on, since September, and they have helped us in the down months like October '20 and January '21.

As you all well know, the cornerstone of our Investment Management principle is Loss Aversion.

India Performance Analysis

After the October-November '20 silliness of the leveraged financials rally, which we sat out, and gave up some of our gargantuan alpha, India reverted to a more sensible market, from December, which continued into January '21.

The top performing stocks in January for us were Tata Elxsi (+44%), Tata Motors (+31%), Sequent Scientific (+23%), Alkyl Amines (+23%), Balaji Amines (+20%), IndiaMart (+11%), JK Cement (+11%). So, it was a decent outing.

That said, India looked fragile, in relation to other Emerging Markets: hence our stance is to stay away from the area that can inflict the maximum damage: Banks and NBFCs. We own just two small Positions here: Yes Bank and RBL, both offering some optionality in a Sector that remains a volatile, risky space, even now.

Our strategy continues to be one of owning a clutch of low-correlation plays, avoiding higher risk areas of the market, and keeping things tight and safe, instead of loose and unsafe.

To reiterate, the way we do things around here are:

  • Avoid the Big Losses

  • Be the "House", not the "High Rolle"

  • Play Everything. Believe Nothing

  • Stay Nimble. Stay Hare-ish

Take a look at the Comparative Performance till January 2021.

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And our Human+ Machine delivers these Returns with the lowest possible risk.

As we've said before.

We do not run "High Conviction" risk.

We do not run "Storification" risk.

We do not run "High Concentration" risk.

And yet we deliver.

Or maybe, that's why we deliver.

That is the beauty of our proprietary Human+Machine investment model.

For those who aren't invested with us, but want in, just drop us a line on https://bit.ly/3orHmQN and we will drop you an email, as quick as a Bumrah yorker.

By the way, you can also WhatsApp us on +91 88501 69753

Chat soon!

From Your Friends at First Global

Trusted Financial Advisors to some of the world's largest Funds, Institutions & Family Offices, for 30 years

https://firstglobalsec.com

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