Weekly Top Trading Ideas Summary: ALL IN
FULL REPORT ATTACHED
Note that we are exiting part of the Yahoo/Alibaba trade to focus on Softbank
The period from the end of Q4 til the end of the following Q1 is traditionally the best one for relative value trading. As such, we would advise to go "ALL IN" between now and the end of the year in some of the major trades which will think will shape 2015: in particular:
- Short US equities / Long Emerging markets (in particular China), Japan, and Europe equities.
- Long natural resources: oil (IXC US) and miners (BHP, Rio, Anglo, Vale)
- Long banks, in particular in Europe, Japan, and China
- Out of G-7 government bonds; out of high yield
- Long volatility US stocks (ie long puts) / and short volatility Europe (ie short puts); long general market volatility (ie long gold; gold miners)
Last week, TITS was up 50bps, broadly in line with the MSCI World Index. Since June 30, TITS has generated more than 200bps of net trading alpha over the MSCI World Index.
Note: Top Trading Ideas is made up of two model portfolios: 1. ATTIP, AIM&R's Top Trading Ideas Portfolio which is the model portfolio of all of our top trading recommendations. Trades are entered when recommendations are made, and closed when we recommend to exit the trades. All trades/investment positions are justified by a published research report. We track the performance of this portfolio which we benchmark against the MSCI World Index on an unleveraged return on assets basis (return/long+short gross exposures) and against the HFR Global Hedge Fund Index on a leveraged return on capital basis. 2. The weekly TITS, or Top Ideas Trading Selector where we highlight what we consider to be the most timely trades from ATTIP on a weekly basis with the objective of creating trading alpha.