2020 was the inception year for GLP. We’re here at eToro for a month now with the GLP in its final form. Untill December the portfolio was run on www.GlobalAlphaSearch.com The portfolio’s inception took place on the 28th Jan 2020. Just days before the end of a 10-year bull run and what then appeared to be the deepest recession in history.
Here’s a link to the inception post of GLP for those of you, who’d look to learn it’s rules: globalalphasearch.com/global-leaders-portfolio-inception/
It’s time to make a quick summary of how my portfolio did this year (I am using morningstar.com statistics as that’s where GLP was run before I was invited to join eToro Popular Investor Program in Dec):
👉 Total gain in 2020: +17.5% (vs. Morningstar US Mkt Index +17%/ $SPX500 TR +16.6%)
👉 Best month: July +6.7%
👉 Worst month: October -2.1%
👉 Winning months: 8
👉 Losing months: 3
👉 Downside protection characteristics: during the Covid-19 plunge months (Feb/March) Index was -8.4% and -13.7% respectively, whilst GLP outperformed massively during that period (+1.4% and -1.4% respectively) thanks to high exposure in $TLT and $GLD and Recession-adjusted equity allocation of good outperforming stocks (cut to 20% from the starting 40% typical for the boom phase). Sortino ratio: very high around 3.6 (Sortino greater than 2 is considered good). Sharpe ratio: very good around 1.7 (Sharpe greater than 2 is considered good).
👉 Current/Avg eToro risk score: 3/3
👉 Number of stocks as of end 2020: 14 plus a small position in $SPY
👉 Current weight in $TLT 33%, $GLD 32%, stocks 25%, Cash 10%
A notice to make here: I am letting the equity allocation run a bit above the 20% level (as assumed for Recession), because (a) I expect a cycle phase change in 1-2Q2021 (b) I am comfortable with the current equity holdings and expect more upside here. The phase change signal from our macro forecasting tool (Enhanced Aggregate Spread by Dr.Robert Dieli) will of course be the trigger for a substantial increase in equity allocation, once it happens.
To summarize 2020 from the GLP perspective I must admit that I am very happy with the performance. The portfolio did great in delivering my goals:
👉balanced porftolio capturing both worldwide growth opportunities (via exposure to stocks that pass SIAScore (more on scoring here: globalalphasearch.com/scoring-deep-dive-into-sia-3/) and safety (via long-term high grade sovereign debt exposure like $TLT and inflation-hedged value holders like $GOLD ($GLD));
👉 minimalization of downside volatility by having an asset weight mix that is appropriate for the current cycle phase;
👉 stable gains;
👉 maximum diversification effects by keeping a mix of assets with zero or negative correlation (equities, LT treasuries, Gold, cash).
Here’s the full portfolio structure: www.etoro.com/people/pawelcylkowski/portfolio
December rebalancing: I have not changed anything in the portfolio end of this month as it is currently structured exactly as it should. No adjustments were needed. From now on I cease to run the GLP on morningstar.com, hence the return since inception calculaiton is being stopped as well. Going forward the GLP performance will be calculated as per eToro.
Plans for 2021:
👉 obeying the portfolio rules no matter what
👉 systematic rebalancing (most often monthly)
👉 search for further equity portfolio candidates
👉 regular communicaiton with Followers/Copiers
👉 regular value-added educative posts.
I would like to thank everyone following/copying me 🙏🙂. I hope to be able to provide good quality stable profits for You and myself in 2021 and onwards.
Best of luck to all of us!
Disclaimers: None of the ideas, views and thoughts presented here shall ever be taken as a recommendation to buy or sell stocks,bonds,FX,commodities or any other financial instruments as stated in REGULATION (EU) No 596/2014 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC or the Polish Act of 10 February 2017 amending the act on trading in financial instruments and some other acts. The article is for educational reasons and purely presents private views of the author, thus the author shall not be held accountable for any losses of a third party resulting from any potential trading activities in any instruments, both specifically or by category of assets. The author uses his best knowledge and data from sources believed to be reliable, but makes no representations as to the accuracy of the data.Full Disclaimers&Liability Limitations page.