The Dual Momentum Fund – December 2018 Performance Review
The Fund’s return of -0.47% for December held up well against our major markets which as a group returned -7.78% on a market-cap weighted basis. Continued market weakness with only a few new trends emerging from the gloom saw the fund maintain its high cash levels throughout December and at month end the fund cash balance stood at 89.1% with just 10.9% allocated to open stock positions.
Significant weakness in the Australian dollar during December moderated the poor global returns noted above, such that on a currency adjusted basis our major markets returned -4.18% for the month. The fund’s high cash balance, which is held in Australian dollars, led to these currency movements having little impact on our own December results.
We’re pleased to see that during this recent market turmoil our peak-to-trough drawdown of 10.13% compares very favourably with those of our major markets, with drawdowns in the US (Nasdaq) of about 23%, and Japan of over 21%. All markets remain weak and defensive, albeit with some very strong counter-trend bounces which suggest that uncertainty is likely to continue for some little while yet. Given that, some strengthening stocks are emerging in our markets and in line with our strategy a small number of new positions are gradually being accumulated. Our high cash balances coupled with our ability to quickly deploy this cash as new long-term trends become established means that the fund remains both well insulated against any further market deterioration and well positioned to take advantage of improving market conditions when they occur, which they will in time.
Our proven strategy of systematically targeting stocks whose individual share price is both increasing and outperforming over medium to long term time frames will continue to be applied. Our active bottom-up investment style will guide portfolio allocations such that they will continue to expand or contract in response to market risk and reward characteristics as they continue to evolve.
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The Dual Momentum Fund remains open to new investment. Apply online by first downloading and reading the Information Memorandum and then clicking the button below. The facility is also accessible from our company website at www.thedualmomentumfund.com.au.
If you have any queries or would like to know more please contact us anytime at mail@thedualmomentumfund.com.au or on +61 8 9284 2906
