Annual Portfolio Review: Stock Selection, Asset Allocation, and Futures Trading
Summary
This annual review explains how the author groups UK stocks, ETFs, equity hedges, systematic futures trading, and cash to assess performance against suitable benchmarks. It reports contributions and internal rates of return, compares stock picking and long-only holdings with benchmarks, and breaks down futures results by trading, hedging, fees, interest, and foreign-exchange movements. The account structure and benchmarks are revised to simplify future reporting.
The review describes buying relatively cheap stocks in sectors not already held and managing ETF exposure through a model portfolio. It also discusses increased ETF turnover during volatile markets, tax-related sales, concentration and allocation choices, and the effect of holding foreign currency for futures margin. Reported outcomes cover a particular year and reflect the author’s holdings and cash flows; the author emphasizes process, and the results do not establish that the stock-selection approach will persist.
Key ideas
- The author separates long-only holdings, equity hedging, futures trading, and cash to make performance attribution clearer.
- Different portfolio segments are compared with benchmarks suited to their exposures.
- The reported futures outcome separates trading profits from hedge results, fees, interest, commissions, and currency effects.
- The stock-selection approach favors relatively cheap names in sectors not already represented in the portfolio.
- The author manages ETF exposures through a model portfolio, while noting tax and capital-gains constraints on rebalancing.
- Annual results describe one investor’s experience and do not establish that the approach will continue to outperform.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.