Positioning to benefit from lower volatility


Manager: Focal Point Management

Models: Quantitative Broad Index, Quantitative Hedging

The broad financial markets experienced upward price action in January, while volatility continued to decrease.

Our volatility-based portfolio was positioned to benefit from periods of lower volatility. And we did in fact benefit from positions in VelocityShares Daily 2X Vix Short Term  (TVIX)-- long volatility-- and VelocityShares Daily Inverse VIX (XIV) --short volatility --as our signals in the Quantitative Hedging Model changed during the month.

Our rotational strategies in our more conventional long/short equity index portfolio primarily kept us in short ProShares UltraShort S&P 500 (SDS) positions, although we reduced exposure towards the latter part of January.

Key to our outlook going forward will be institutional participation in the equity markets, moderate to low volatility, and continued improvement in the economy and corporate visibility into future earnings.

Covestor Ltd. is a registered Investment Advisor. Covestor Investment Management licenses investment strategies from its Model Managers to establish investment models. The commentary here is provided as general and impersonal information and should not be construed as recommendations or advice. Information from Model Managers and third-party sources deemed to be reliable but not guaranteed. Past performance is no guarantee of future results. Transaction histories for investment models available upon request. Additional important disclosures are available here. For information about Covestor and its services, go to our website, Covestor Investment Management or contact Covestor Client Services at (866) 825-3005, x703.

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Posted In: Markets
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!