As we approach the halfway point of Q3, it’s time for a quick portfolio check-in. In this update, we’ll cover the latest performance, our current asset allocations, top conviction buys, areas we’re avoiding, and the strategic moves we’re making heading into Q4.

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The bulk of the headaches came from President Trump’s changing rhetoric, with tariff uncertainty spreading not just through the equity markets but also in the Treasury space and commodities.

The 19% gain for gold during the quarter and the 12% drop in Bitcoin highlighted the extent of investor caution.

Aside from Trump, markets were spooked by AI worries, both with the rise of DeepSeek and the conversation around whether AI infrastructure spending is warranted in such quantities.

Finally, a recalibration of European growth prospects with large spending plans helped to provide some bright sparks, even if it’s partly driven by concern about Russia. China tech outperformed, but many still hesitate to get involved.

Performance

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Markets have been trading headline to headline, which creates a challenging environment. Looking past the noise will be key. The portfolio results in January, along with positioning and thoughts for the month ahead, are detailed below.

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Here at AP HQ, we’ve always put our money where our mouth is. However, before this year, we all traded and invested via different portfolios. Some of the feedback we received from early subscribers was that they’d like us to have a separate AlphaPicks Portfolio, whereby we invest in the thematic ideas that we write about and take advantage of opportunities that we flag up.

This seemed like a good idea, so we pooled some cash together and launched our portfolio as of Jan. 1st 2024.

To keep us honest, each month, we published a portfolio update to our paid subs, detailing what we bought and sold, along with our holdings at any point in time. Given we’re a multi-asset unconstrained fund, we set our benchmark as 40% equities / 30% fixed income / 20% commods / 10% FX (more details on the exact benchmark can be found in any of the updates).

Although we aren’t QUITE at the end of the year, we thought this would be a good time to look back. Instead of doing a dull market wrap, we wanted to run through some of the biggest themes of the year via our trades, outlining some of the best and worst trades as we navigated the year. As a note, these aren’t necessarily the positions we made or lost the most money on, but rather when our conviction calls or thinking was spot on (or terrible).

Enjoy!

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Portfolio Return vs Benchmark

AP Port: +17.01%

Benchmark: +11.07%

Best Trades

Q1

Barclays Turnaround

Back in January, we wrote a piece entitled “Why Barclays Is A Screaming Value Buy”, which was quite a strong title. We spoke about the low P/E ratio, generous dividend yield and relative value metrics versus other banking peers. With the CEO due to release in February details of the transformation effort dubbed Project Minerva, we thought it was a good inclusion to buy.

Barclays rallied almost 26% in Q1 alone and has continued to do well, with us taking profits on the trade in the summer.

Coinbase

The team’s outlook on crypto was bullish as the year started, and we saw value in adding exposure to some of the related names. We bought Coinbase shares for around $125 in January and had doubled our money by the time we sold in late March.

It’s true that the stock now sits at $310, but we flag that it was trading sub $150 even in September, so we feel it was the right play to trim when we did. Arguably, the missed trick was going back in Q4, but we did add direct crypto exposure (more on that below).

Q2

Palo Alto Reversion

PANW was one of our largest portfolio holdings for Q2, with us being able to jump on the stock after the February drawdown and ride it back higher patiently:

However, with decent unrealised profit on a large holding, we spoke about what we wanted to do as we approached May earnings. In the end, we decided to simply cut half of the position and bank profits. We sold the rest later in the summer, but given the move higher in Q4, we should have left some money on the table. But this was still a great purchase post Feb earnings for a mean reversion.

Britvic Takeover

This was a great play that we jumped on in June. We wrote about it in detail just as we bought the stock in “The Takeover Tussle”. Carlsberg had made two takeover bids for Britvic within a month. These were both unsolicited but highlighted its strategic interest in expanding its presence in the soft drinks market.

After doing our own research, we felt that not only was a third bid coming, but an improved offer would likely get Britvic to say yes if it was closer to the 1,300p level. As a result, we bought the stock at 1,080p, were correct about the higher (and accepted) offer, and have enjoyed the ride higher.

Q3

China Pop

In late September, we wrote a piece called “China's Bazooka”, where we discussed the short-term potential for an equity market rally. In the conclusion we noted:

“We raise this to note that there are some big names who have taken the contrarian view on China and are looking for bigger rebounds in the market. Our take is that stimulus efforts can lead to some tactical trades in China, but we aren’t here for the long run.”

In terms of trade expressions, we liked Meituan and Alibaba but ended up going long the CSI 300 and Alibaba in the portfolio.

Both trades paid off handsomely, with us taking profits in early October. The percentage gains from both are shown below:

Q4

Bitcoin Breakout

Ahead of the US election, we published two pieces that led us to buy Bitcoin. The first was a Trump trade rec in our U.S. Election Trading Primer. Then, in late October, we released “Is A Bitcoin Breakout Coming?” where we flagged up factors such as the technical picture, our bias towards a Trump victory, investor flows and the cross-asset correlations.

We went long at $67k and benefitted from the rally that has since ensued. As we posted on X, we trimmed half of this ahead of $100k, with the other half being moved into ETH:

We’re not against going back in on BTC, but it’s a very volatile asset that we have to use very carefully within the portfolio to avoid large potential drawdowns or generally causing the portfolio to trade more like a meme stock than an investable fund.

Worst Trades

Q1

Snowflake Earnings

This was an incredibly frustrating one. We bought SNOW shares to start the year and were up circa 25% going into earnings in late Feb. Our mistake was not partially hedging our exposure here, but we didn’t expect such a volatile reaction in February. The CEO stepping down and a weaker-than-expected outlook saw the stock fall 20% overnight.

We held onto the position after this for longer than we should have, causing us to take a hit that really could have been avoided given that we had such a buffer room to set a stop at flat.

Boeing Blowout

Just a few weeks before we started the portfolio, we wrote a piece entitled “Boeing's Booming Orders And Bullish Momentum”. New orders and a host of analyst upgrades made the stock look attractive to us as a value play, much the same way as Barclays. So when the first issue of a door on a Boeing 737 MAX 9 aircraft blowing out and the stock fell, we thought this would be an isolated incident to which the market had overreacted.

As history now tells us, this was the start of multiple issues for Boeing planes, which caused scandals and a lot of headaches for Boeing investors.

Q3

US Treasuries

Over August, we increased our exposure to bonds, moving into some UK Corp debt as well as US Treasuries in the 7-10-year space. We felt that, particularly in the US, the narrative of faster-than-priced Fed cuts would play out.

Even though we did see our Treasury positions initially move in our favour into September, bond yields went on a mega rally in Q4, fuelled by stronger US data and a market that was more risk-on than we had anticipated.

Q1-Q4

Not owning Nvidia

No explanation is needed.

The Road Ahead

Our exposure in 2024 was heavier on equities than expected, but one simply had to be overweight US stocks, given the investor flows there this year.

As we close out the year, we definitely feel the bond markets are telling us something - namely that the Fed might have to cut back on rate cuts due to higher realised inflation. In fact, the existing rate cuts might already have started to fuel the inflation fire, and we haven’t even started on Trump’s fiscal spending agenda.

Geopolitics should play a heavy part next year, which will likely see us take more commodity exposure (we had it this year, just not focused on in this piece).

We were FX light and derivatives light, but this was mainly a function of our trading platform and margining requirements. We recently moved to Interactive Brokers, which looks like we’ll be able to solve this in 2025.

We hope you enjoyed this round-up. To stay in the loop in more real-time about our trading activity, consider becoming a paid subscriber to access our chat posts and monthly portfolio updates.

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November can be encapsulated by the phrase “animal spirits.” Markets were risk-on with the election in the rear-view mirror. Some risk assets had the best month of the year. Bitcoin +37%, Nasdaq +4.6% and S&P 500 +5.4%.

The election provided a lot of opportunity as markets transitioned into a new regime. The team actioned many of the ideas that were laid out in the ‘Election Primer,’ pushing the portfolio to a 16.58% gain YTD (as of Dec. 2).

In this article, we’ll review the performance details of our Global Asset Portfolio and explain what we bought and sold, as well as our positioning for the final month of the year.

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November

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October saw markets position into what is the biggest week of the year: The U.S. Election.

In this article, we’ll review the performance details of our Global Asset Portfolio and explain what we bought and sold, as well as our positioning for November. To join the team at AlphaPicks and benefit from this article and the rest of our research, you can manage your subscription here.

October

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September saw a new chapter in the macro regime as the Federal Reserve started their descent from elevated monetary policy rates. Volatility in oil markets continued, which have been heightened as October gets underway. Of course, China took the headlines in the closing weeks, setting a strong tone for emerging market allocation.

In this article, we’ll review the performance details of our Global Asset Portfolio and explain what we bought and sold, as well as our positioning for October. To join the team at AlphaPicks and benefit from this article and the rest of our research, you can manage your subscription here.

September

Last month, the portfolio made a 1.45% return, outperforming our benchmark by 208bps, with low volatility/drawdown. Allocation across bond markets and our positions in commodities and China equities led this this return.

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At the beginning of the year, we developed this portfolio to share with our Substack audience. Our team devotes numerous hours to researching and writing articles, as well as sharing our individual trade thoughts with you, the reader. Most of our weekly research posts focus on thematic ideas.

For the month of August, we wrote about the Flash-Crash market rout, macro thoughts on the Fed’s rate path and inflation expectations going forward.

In this article, we’ll review the performance details of our Global Asset Portfolio and explain what we bought and sold, as well as our positioning for September.

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At the beginning of the year, we developed this portfolio to share with our Substack audience. Our team devotes numerous hours to researching and writing articles, as well as sharing our individual trade thoughts with you, the reader. Most of our weekly research posts focus on thematic ideas.

For the month of July, we ran through our current view on the state of the European equity and debt space, issues in the consumer discretionary space and where to hide during a market rout.

In this article, we’ll review the performance details of our Global Asset Portfolio and explain what we bought and sold, as well as our positioning for July.

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At the beginning of the year, we developed this portfolio to share with our Substack audience. Our team devotes numerous hours to researching and writing articles, as well as sharing our individual trade thoughts with you, the reader. Most of our weekly research posts focus on thematic ideas.
For the month of June, we published some key insights on elections trading strategy, and on the market’s reaction to recent US inflation data and its impact on Fed rate expectations.

In this article, we’ll review the performance details of our Global Asset Portfolio and explain what we bought and sold, as well as our positioning for May.

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In this article, we’ll review the performance details of our Global Asset Portfolio and explain what we bought and sold, as well as our positioning for May.

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May

Last month, the portfolio gained by 0.96%, in contrast to the fall in our benchmark of 0.18%. The performance of the month is shown below:

This brings our total return for the year to 10.79%, compared to the benchmark return of 3.94%.

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So, we decided to start a portfolio to highlight the alpha that we return.

In this article, we’ll run through the performance details of our Global Asset Portfolio, as well as running through what we bought and sold, why we took the actions and how we are positioning for May. If you want to go back and see more commentary for Q1, you can view that here.

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April

Last month, the portfolio gained by 2.46%, in contrast to the fall in our benchmark of 1.20%. The performance of the month is shown below:

This takes our total return on invested capital for the year to 13.25%, in contrast to the benchmark return of 4.13%.

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The team spends many hours researching and writing articles, along with our respective trade thoughts, and share these with you as the reader. Every Monday, we collate our watchlist and ideas for the week ahead, covering global markets. We don’t just publish these articles and forget about them. We actively follow the ideas we issue.

So, we decided to start a portfolio to highlight the alpha that we return.

This article will examine the buys and sells of our Global Asset Portfolio for Q1 2024 and what we’re currently holding as the new quarter begins. We also share what’s on our radar for the coming months.

The Return

In Q1, the portfolio returned 10.47% on invested capital.

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As we hold a mixture of global assets (not just equities), we have tracked our performance against the following benchmark:

• 40% weighting of the MSCI World Index +9.29%

• 30% weighting of the Vanguard Global Bond Index Fund +0.06%

• 20% weighting of the Dow Jones Commodity Index 6.45%

• 10% weighting of the DXY Index +2.24%

The total benchmark performance was +5.09%. The AlphaPicks Portfolio outperformed by +5.38%.

Given that the fund has only been running for three months, there’s little value in sharing other metrics, such as the standard deviation of the portfolio, or ratios, such as Sharpe and Information. However, we’ll start to share these metrics in our Q2 update.

Let’s examine the quarter’s winners and losers and consider the current holdings as Q2 gets underway…

The Losers

We focus on reducing our beta in this portfolio. So, it makes sense to start with our losers, of which there were few.

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