The Dual Momentum Fund – March 2019 Performance Review

The Fund returned -0.36% for March in a month which saw mostly sideways action for most of our markets, especially when compared to the stronger returns in January and February.  Our portfolio continues to progress through the re-setting phase described last month, where stocks with strengthening trends consolidate their positions in the portfolio while those whose trends fail to proceed are replaced with new opportunities. The natural consequence is that the proportion of the portfolio which comprises confirmed rising and outperforming trends increases steadily over time.  Stable markets help of course, and March’s largely sideways action saw more ‘false starts’ than usual, increasing the number of small losses taken and somewhat prolonging the return to our usual weighting of up-trending and outperforming positions. The fund closed the month virtually fully invested, with global equities comprising 95.4% and cash levels of around 4.6%.

Market returns were mixed, with the Nasdaq, Hong Kong and UK being the strongest and the balance neutral to slightly negative. USA, Hong Kong and Canada remain our largest country exposures and Materials, Information Technology and Utilities comprise our largest global sector exposures.

Currency movements were neutral to negative during March with a net effect of -0.2% on a portfolio weighted basis.

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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