We are pleased to announce our Private Company First Half Trading Results.
Our business generated a 39.91% return for the first half of 2020 on our capital base.
We started the year with a cross-asset net long volatility exposure. Our portfolio was positioned around Gold, US Shale Pipeline Equities and US Interest Rates. Despite the market making new highs in January, we had concerns with the continued melt-up in equities, as we were reaching and exceeding key valuation metrics, while volatility measures in these asset classes registered near all-time lows.
As the financial impact of the COVID-19 pandemic became apparent in early February we expanded our portfolio risk to incorporate S&P500, Nasdaq and Russell2000 and GBP/USD volatility structures. During April and until mid-May we opted for a cautious risk stance, in part due to unwinding into the high volatility levels and not encouraged by binary risk profile presented by Fiscal Support Measures & Monetary Stimulus relative to Economic shutdowns and the growing COVID19 Health Crisis.
Mid-May we acknowledged that the reaction function of the markets to the fiscal support and monetary stimulus was deeply positive. Adjusting our existing strategy to acquire short-dated volatility in assets that had multi-time zone liquidity allowed us to take advantage of several market factors trading across time-zones.
As we move forward risk factors we are watching carefully for signs of change are fiscal support measures, monetary stimulus, consumer spending and money flows in financial assets. Derivative markets have re-priced forward earnings and dividend distributions, however we are looking across the economy for the persistence of material bankruptcies and dislocations in parts of the credit markets to adjust consumer and corporate behaviour.
As always we’d like to thank our trading execution partners from Interactive Brokers and Saxo Bank. Thanks to Chatham House and Geopolitical Futures their perspectives.
Re-affirming our social commitment we continue with our 2020 donation programme to include Feeding Hong Kong and Hong Kong’s Save The Children Coronavirus Relief Fund.