Looking back on the quarter
As expected, the stock market continued in 2023 to move rather turbulent, as good and bad news did keep balance. Inflation is still high and the top worry all over the (western) world. The increasing interest rates have put some banks in very unconfutable situations. In the US one bank hast gone bust and the forced acquisition of Credit Suisse by UBS was a national disaster for Switzerland.
Report & review of the individual strategies
With stocks not really trending in any direction, my delta neutral strategies become ever more important. Thus, I will ramp up the allocation especially for the Iron Condor Strategy. They show some very nice performance the last quarter and expect them to continue going forward as I expect the stock market to pretty much stay where it is in the coming months.
For the trend following strategies, not having clear trends (either up or down) will naturally limit their performance. They have been mostly in (half) safety positions, only really being fully allocated (long) in the second half of march where the stocks have had some recovery. Accordingly, the performance was slightly negative as both February and March had a fast drawdown which forced us into safety positions, resulting in some limited losses. But from a technical point of view, all strategies did as expected. The safety positions did limit the drawdowns.
Performance of the portfolio
The performance for Q1/23 has been -0.31% with a maximum drawdown of -8.72%. Putting this into perspective, the performance of the SPY was 5.92% with a max drawdown of -9.12%. In my eyes, we did manage the first quarter well enough. Consequently, no big changes apart of the slight increase of Iron Condors will be made.
Outlook & moving forward
I would hope to see some more trends in the market in the coming months. But with inflation still high and some possible additional rate hikes, this might just wishful thinking. The nervosity is still elevated, thus volatile markets are a logical consequence. I feel that I’m in a good position, having around 40% of my portfolio in delta neutral strategies and 60% in trend following. Let’s see what the second quarter will bring us.