The Dual Momentum Fund – April 2019 Performance Review

The Fund returned -0.12% for April, disappointing on the surface compared to broad market indices but not surprising and indeed somewhat encouraging in a period when global momentum as an investment style has been experiencing one of its ‘off’ periods.  Recent research from the US has highlighted that the momentum style has experienced abnormally soft returns across most major global markets (with the exception of Australia) since the downturn in October last year (see research here and here).  This global context puts some perspective around the Fund’s YTD return of +2.89% and we remain confident that the portfolio is well positioned to take advantage of the inevitable reversion of the Momentum style to its more normal pattern of returns.

Our portfolio continues to progress through its re-balancing phase as stocks with strengthening trends consolidate their positions in the portfolio while those whose trends fail to proceed are replaced with new opportunities.  The USA and Hong Kong remain the Fund’s largest country exposures, while Technology and Industrials make up our largest global sector exposures (see the PDF report for full exposure details).  Currency movements were neutral to positive during March with a net effect of +0.4% on a portfolio weighted basis.   The fund closed the month virtually fully invested, with global equities comprising 98.8% and cash levels of around 1.2%.

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.

Download the current portfolio holdings here.
Download the full PDF report here.