The 2CentView portfolio was up 1.5% and flat if you exclude dividends for 2015, which matched the S&P500 but above the FTSE100 which was down 5%.
The portfolio was up nearly 10% mid year, but then the Chinese stock market plunged and was followed an amazing drop in commodity and oil prices, the scale of which no one predicted, sees stocks like Anglo American, Glencore and BHP Billiton drop to record lows.
The objective of the 2CentView system is to outperform the index in rising markets and be at least in line when the major index is flat or falls up to 20%, and outperform if the market corrects more than 20%. The portfolio is benchmarked vs. the SP500 (50%, flat ) and FTSE100(50%, down 5%), so the outperformed by 2,5% in a flat year. Overall return since 2013, 74%.
The exposure to USD/GBP exchange rate is also something to keep an eye on – and 2CentView started using the PUS3 3x Leverage ETFS Short USD, Long GBP to hedge foreign exchange risk, locking in at 1.52.
Where it did badly:
2 Core positions were savaged – SAVE (down 60%), $YHOO (down 50%), $TWTR (down 50%) which cost the portfolio nearly 5% – 2CentView exited these positions, when the 50% threshold was hit. $ACA (Acacia Mining – Gold) was also down 40% due to lower gold prices.
Trades in $AMBA (Amberalla), $GNW (Genworth),$KORS (Michael Kors), $BHP (BHP Billiton) and $AAL (Anglo American) were all stopped out. In the case of $GNW, $BHP and $AAL, these stocks continued to fall and the stop loss system saved the portfolio from losing a lot of money.
Trades in $FIT (FITBIT), $HSBC were hit their targets and were profitable.
Core positions which did well: $FB up 40%, $MRKT, $DLG (Direct Line, up 30%+dividends),$NFLX (NetFlix), $TWOD (Taylor Wimpey, up 50%), $GOOGL up 60%.
Other core positions in $AAPL, $NASDAQ:AAL (American Airlines), $SWKS, $MS, $CELG and Ionis pharma were fairly flat.
Main lesson learnt from 2015 – STICK to your stops – downward moves can be savage – Analysts forecast can severely LAG the market on the downside as well as the upside, so do not fight the market, exit at your stop, re-evaluate and come back in lower down if you still like the stock.
Happy 2016 from the 2CentView team.