The Dual Momentum Fund - January 2019 Performance Review

The Dual Momentum Fund – January 2019 Performance Review

Posted 14/02/2019

Strength gradually return to most of our markets during January such that by the second week of the month an increasing number of new and resuming trends were being identified. Our positive but relatively modest return of +0.12% for the month is reflective of our large opening cash balance and the only gradual deployment of that cash into new equity positions. Once commenced, the deployment of cash into emerging opportunities continued throughout the month such that at month end our equity positions comprised 95.5% of the portfolio, with just 4.5% remaining in cash.

Currency movements during January also weighed on returns, with the Australian dollar falling as much as 5% early in the month but not materially contributing to our return given our very high early cash balances, and then rising strongly by as much as 8% towards the end of the month which created headwinds for our growing portfolio of global assets when revalued back to Australian dollars. Currency movements resulted in a net effect for the month of -2.0% on a portfolio weighted basis.

Market performances varied significantly over the month with Japan and Germany being the weakest performers with 1.9% and 2.6% respectively and Canada and USA (Nasdaq) the strongest with 9.2% and 6.3% respectively.

After a significant portfolio cash deployment into new opportunities, our portfolio typically goes through a ‘settling in’ period, as strengthening trends consolidate their portfolio positions and where those trends which fail to proceed are replaced with new opportunities. Throughout, 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.