Author: Amin Khadiani, Focal Point Management
Covestor model: Quantitative Hedging
Disclosure: Long IYR, GDX, FDN, IYZ
January saw a continuing rally in the broad financial markets along with a continued decline in volatility. Our portfolios stayed on the long side. A low volatility environment makes tactical counter-move positioning difficult, and we will stay bullish until the volatility environment changes. We did see volatility begin to come back towards month-end.
February is historically a weak month for the markets, and as we complete the earnings season, we may see catalysts for a pull-back and/or higher volatility return in February.
Our rotational strategies took us to many sectors, but we were mainly anchored in real estate (IYR). We did have some exposure in other sectors, including precious metals (GDX), internet (FDN) and telecommunications (IYZ).
