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How to skate on thinning ice

Our February '21 Performance

Global Funds' Performance: February '21

The First Global Global Freedom Fund - Global Tactical Strategies

(FG GFF-GTS) (US Dollar terms) is up 1.9%* (with TIPP hedges in place)

Our Global Portfolio product, the GMAAP (US Dollar terms) is up 3.2%*

Vs 

MSCI ACWI Index that is up 2.1%

Bloomberg 80:20 Index that is up 1.8%

*All performance numbers are post fees

 

Global Funds' Performance: Calendar 2021 YTD 

The First Global Global Freedom Fund - Global Tactical Strategies

(FG GFF-GTS) (US Dollar terms) is up 3.3%* (with TIPP hedges in place)

Our Global Portfolio product, the GMAAP (US Dollar terms) is up 4.1%*

Vs

MSCI ACWI Index that is up 1.9%

Bloomberg 80:20 Index that is up 0.8%

*All performance numbers are post fees

 

Global Funds' Performance: Calendar 2020

FG GFF-GTS (US Dollar terms) was up 31.9%*

GMAAP (US Dollar terms) was up 31.4%*

Vs

MSCI ACWI Index that was up 14.3%

Bloomberg 80:20 Index that was up 15.2%

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! 

*All performance numbers are post fees

 

India PMS Performance: February '21

The Pure Equity India Super 50 (IS50) is up 10.2%*

While NSE 500 is up 7.9%

The Asset Allocation India Multi Asset Allocation Portfolio (IMAAP) is up 5.4%*

And CRISIL Moderate Hybrid Index (our benchmark for IMAAP) is up 2.6%

*All performance numbers are post fees

 

India PMS Performance: Calendar 2021 YTD

The Pure Equity India Super 50 (IS50) is up 9.9%*

While NSE 500 is up 5.9%

The Asset Allocation India Multi Asset Allocation Portfolio (IMAAP) is up 4.5%*

And CRISIL Moderate Hybrid Index (our benchmark for IMAAP) is up 1.5%

*All performance numbers are post fees

 

India PMS Performance: Since Inception (Feb’20) till date

The Pure Equity India Super 50 (IS50) is up 43.7%*

Vs

NIFTY 50 that is up 20.8%

NIFTY 500 that is up 23.9%

The Asset Allocation India Multi Asset Allocation Portfolio (IMAAP) is up 21.6%*

Vs

CRISIL Moderate Hybrid Index that is up 18.3%

Since Inception, the volatility for IS50 was 19% as against 31% for the NSE 500 and nearly 48% for the Nifty. The volatility for the IMAAP was a mere 10.4% against 15.4% for the CRISIL Moderate Hybrid Index

*All performance numbers are post fees

 

How to Skate on thinning ice

The first rule for skating on thinning ice, is you need to be light.

As the ice, at least for the US markets, thins, take a look at the people around you, skating on it: most are fat, overfed on easy profits of the past 10 years, and in seriously no condition to be out there skating. At least, not on thinning ice.

Actually, skating on thin ice is a game that involves mathematics and acoustics too. Don't believe us? Read up on the internet. The cracking of the ice has a particular tone when it's about to give.

Both the math (we do a lot of this) and the sounds emanating from the markets have been about the same, for the last few months.

It's our solemn belief that what happened in February, in the last few days, was all set to happen...back in November itself.

Had it not been for that vaccine-induced rally, markets, at least the US, were going to tank.

Almost every price action about the US markets since November, has been worrisome: the slow, grinding upmove. The somnolent FAANMs.

The wholly unjustified Storification & Magnification of Tesla (it's a f.....n car company, for God's sake).

The rally in seriously low quality tech stocks.

The entry of dumb retail into a feeding frenzy of rubbish stocks like Gamestop.

The signs were all there, and we aren't wide-eyed believers of anything.

So, we have kept a defensive stance, largely, light on Tech, light on the Nasdaq, heavy on our TIPP Tech - Tactical Insurance for Portfolio Protection, paying out around 1.7% since November in hedging cost. 

In our Global Fund, GFF-GTS, we sat on a bit of cash too, towards the last week of the month.

The results came through.

What's noteworthy is our repeated assertion that Commodities were a great place to be in, has been on point: our Copper bet, Freeport-McMoRan, has been a stellar performer, our DBC Position, entered back in April 2020, continues to deliver, with Oil being a 40% weight in it.

Calendar 2021 is also shaping up well.

In India, we are CYTD up around 10% vs 5.9% for the NIFTY 500.

Globally, we are up over 3-4% YTD vs 1.9% for the MSCI ACWI and 0.8% for the Bloomberg 80:20 Index (since we rarely run 100% Equity Positions, the Bloomberg 80:20 is a great benchmark).

Don't forget: we have delivered these numbers with a diversified, relatively low-correlated strategy.

Anybody can buy a handful of hot momentum stocks and look good for a while.

Remember Janus in Year 2000?

And recall the massively concentrated bets on Tesla and some other Tech names, by some ETFs.

That isn't investing.

It's gambling.

Big difference. Often ignored.

Global Performance Analysis

We had a decent outing with some of our holdings, with Carnival and Royal Caribbean cruising (low-brow but hard to resist) nicely as below:

Digital Turbine Inc. (+42.3%), Carnival Corp. (+40.9%), Royal Caribbean Inc. (+40.9%), MP Material Inc. (+40.6%) SNAP Inc. (+34.1%), Freeport-McMoRan Copper (+31.0%), Fiverr International (+29.0%), Deere & Co. (+23.5%) and Etsy (+10.6%).

We have comfortable positions in Energy, Financials, Asia-Pac, Global Retail, Global Autos (not Tesla, though we have owned it in the past).

Of course, our REITS have been terrific: we made our move on them last quarter of 2020, and since then, they have been nothing if not excellent.

Overall, we are positioned only about 40% in Global Tech, and extremely watchful.

We don't ever want to get fat, overfed and lazy with easy profits.

India Performance Analysis

In India, the Union Budget on February 1, was a colossal event, one that we will remember a long time.

Our Portfolio rocked, and what's most remarkable is that on the last day of February, when the market fell 3.2%, our Portfolio was down just 1%!

How did that happen?

TIPP and very, very careful portfolio construction (we can't overstress this enough).

Our Top Indian performers were Happiest Minds Technologies Ltd. (+48%), Hindalco Industries Ltd. (+47%), CG Power (+43%), Dixon Technologies (India) Ltd. (+42%) and Deepak Nitrite Ltd. (+42%) - as diverse (and hence low correlated) a bunch as you can think of.

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

Our Investing Mantras

 

  • Avoid the Big Losses
  • Be the "House", not the "Gambler"
  • Protect in Down Markets
    Participate in Up Markets
  • Play for Singles. Not for Home Runs
  • Play Everything. Believe Nothing
  • Not Bullish. Not Bearish. Be Hare-ish
  • Great trades are like buses. There's always one coming
  • No Storification. Just Datafication
  • Rigidity Kills. In Arteries. And in Investing

 

Take a look at the Comparative Performance (till January 2021, which we will update once we have February for everybody else)

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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/37PMqZW and we will drop you an email, quicker than the recent cricket test match at Ahmedabad.

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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