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Seeking Absolute Returns
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Seeking Absolute Returns

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The EquityBell Securities leveraged model portfolio started on 27th January 2009 as a paper trade with an initial value of £100,000. …

The EquityBell Securities leveraged model portfolio started on 27th January 2009 as a paper trade with an initial value of £100,000.
The paper portfolio is up 4.15% in the first 7 days.
Only our most robust investment ideas will be placed into the portfolio explaining the rationale, entry price with comments on reasons for holding and explanation of the exit and price and net profit and loss.

Published in Economy & Finance
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  • 1. MODEL PORTFOLIO SEEKING ABSOLUTE RETURNS 3rd February 2009 Sound Advice EquityBell Securities was set up in October 2008 to provide outstanding investment advice to clients running non-discretionary portfolios through direct market access brokers and wealth managers. The credo is absolute returns by giving sound advice in asset classes that are individually appropriate to the risk appetite and base currency of each particular client. The EquityBell Securities leveraged model portfolio was started on January 2009 as a paper trade with an initial value of £100,000. Starting Value £100,000 The portfolio currently has an NAV of £104,152, up 4.15% in 7 days. Portfolio NAV £104,152 Only our most robust investment ideas will be placed into the portfolio Profit £4,152 4.15% explaining the rationale, entry price with comments on reasons for holding Current Positions and explanation of the exit and price and net profit and loss. FX Open trades None Commodities Date Asset size FX price £ value margin Price £value £ P/L None now 26/1/2009 June Gilt Short 1 GBP 118.71 118,710 3000 118,29 118,290 420 Fixed Income Future Short June 10 yr Gilt Future 26/1/2009 MRW Long £50k GBP 258.00 50052 7,500 259 50246 194 shares CFD’s 26/1/2009 SBRY Short GBP 309.75 50024 7,500 323 52,165 -2,140 Equities shares £50k Food Retail Spread CFD’s Long Morrison CFD 258p 26/1/2009 Carrefour Long €50k EUR 26.495 47,200 7,000 26.46 45,101 -2,105 shares CFD’s Short Sainsbury CFD 26/1/2009 LVMH Short EUR 43.42 47,200 7,000 41.90 43,603 3,628 309.75p shares €50k CFD’s Luxury/Staple Spread Long Carrefour CFD @ €26.495 Closed trades Date Asset size FX price £ value margin Price £value £ P/L Short LVMH now taken CFD @ €43.42 26/1/2009 EURJPY Short EUR 118.606 92,988 2,800 113.35 89,598 4,155 FX 100k THIS IS A MARKETING COMMUNICATION FX instrument. This note has not beennot be construed as an invitation or requirements designedinvestment vehicle or Intended for information only and should offer to buy or sell any prepared in accordance with legal to promote the independence of investment research; and is not subject to any prohibition on dealing ahead of the dissemination of this marketing note. EquityBell Securities will provide extra detail on data or graphs used in this note upon requested.
  • 2. MODEL PORTFOLIO SEEKING ABSOLUTE RETURNS 3rd February 2009 Sound Advice Bad economic prospects in the Eurozone have seen the EUR weaken against most major currencies this week and especially against the JPY. Having shorted EUR100,000 against the JPY @ 118.606 on Tuesday January, the exchange rate reached 113.35 we decided to take the profit and close the position. The short EUR100,000 against long JPY was closed @ 113.35 to take profit Source: Saxo Bank Commodities Gold has rallied strongly and we were not able to establish a long position at an acceptable price as we wished. We do believe Gold will rally over the longer term and continue to pursue a suitable entry price. . Source: Saxo Bank
  • 3. MODEL PORTFOLIO SEEKING ABSOLUTE RETURNS 3rd February 2009 Sound Advice Fixed Income The short Gilt future remains one of our most robust ideas as we have a strongly held belief that longer dated GBP interest rates will rise significantly (the same for the US$). The short Gilt future is a core longer term position in portfolio that we continue to hold. We suggest continuing to hold the short 1 contract of the FLGM9 June UK Long Gilt Bond futures Equities Low volume and short term uncertainty still make it difficult to suggest outright longs or shorts with any degree of certainty, which is why we prefer suggesting relative value “pairs” trades as follows. Food Retail Spread Morrison 259.00p on a 12.61 PE and a 1.87% div yield, 2009 est EPS 16.77p Sainsbury 323.00p on a 17.41 PE and a 3.88% div yield, 2009 est EPS 20.03p We suggest continuing to hold the long Morrisons, short Sainsbury spread, looking for convergence. Luxury/Staples Spread Carrefour €26.495 PE 10.12 and a 5.27% div yield, 2009 est EPS €2.60 LVMH price €41.90 PE 10.20 and a 3.91% div yield, 2009 est EPS €4.36 Although the short LVMH and long Carrefour relative value spread is showing a good profit, we continue to see convergence and suggest continuing to hold the position. Comment We are seeking new positions to implement into the portfolio, but uncertainty and gloom casts a long shadow over the large amounts of cash that could be invested if market participants had any kind of confidence. Once we have a clearer picture of cash flows, we will make some new suggestions. EquityBellSecurities Quay House, 2 Admirals Way, Canary Wharf, London E14 9XG Tel: +44 (0) 20 3189 2108 www.equitybell.com Risk Warning Notice: Equity Bell Securities is a trading name of Equity Bell Limited (registered office: Talbot House, 8 – 9 Talbot Court, London EC3V 0BP. Registered in England and Wales No. 6725781) is an Appointed Representative of London Islamic Investment Bank Limited, which is authorized and regulated by the Financial Services Authority. Whilst every attempt is made to ensure the accuracy of the information provided, no responsibility can be accepted for any inaccuracy. The information provided cannot be relied upon as constituting a recommendation, nor construed as any offer to sell, or any solicitation of any offer to buy investments. No liability is accepted for any loss whether direct or indirect, incidental or consequential, arising out of any of the information being untrue and / or inaccurate, except caused by the wilful default or gross negligence of EquityBell Securities, its employees, or which arises under the Financial Services and Markets Act 2000.