Alternatives have made 3% since June 2020

February 22, 2021

Alternatives made 3% on average

After Equities and Fixed Income, Alternatives form an important part of a lot of customer portfolios. The chart above plots the return and volatility of the Alternatives component of Canopy customer portfolios from June 2020 to date.

Some specific Alternative funds have had an awesome 2020. However on a customer portfolio level these bright sparks have tended to net off with some poorly performing funds and net returns are pretty much middle of the fairway. As you can see from the chart, the average absolute returns have been 3.0% (which annualizes to around 4.7% p.a.). Volatility has been quite low at 7.0%.

More Canopy customers prefer Citibank stock to Bank of America

SEC requires all institutional investors with more than USD 100 million in assets under management to disclose their holdings in a quarterly filing called Form 13F. This has to be done within 45 days of the quarter end and most investors delay filing to the last possible moment. Therefore bulk of the filings came in last week

As mentioned in the previous newsletter, Canopy customers have beaten the market in the last 6 months by a significant margin. Therefore I thought our readers will be interested in knowing the differences in top 20 holdings between Canopy customers and US Institutional Investors. See table below (Excel version of the table can be downloaded from here)

For your convenience, we have greyed out the stocks which are present in both lists. Stocks which are only in the Canopy top 20 are in Orange and those which are only in the US Institutional Investors are in Blue.

Canopy customers seem to have a stronger opinion of Citibank, Coca Cola, Nike, Nvidia and Taiwan Semiconductors. US Institutional Investors are more bullish on Berkshire, Home Depot, Mastercard, Proctor Gamble and Bank of America

Change in Canopy Equity Sentiment Indicator

As mentioned in the last two newsletters, we have been seeing selling in HKD listed equities for a few weeks now. Last week the CSI 300 finally fell 5%. While the selling has stopped since that fall, we are nevertheless moving our investment sentiment index to medium.

Conclusion (tl;dr)

  • Alternatives have made an average of 3% since June 2020 with a volatility of 7%
  • A larger number of Canopy investors like Citibank, Coca Cola, Nike, Nvidia and Taiwan Semiconductors as compared to the US Institutional Investors.
  • We have moved our Sentiment Index for Chinese equities to medium medium

Please note that this newsletter is just a data analysis of actual investor behavior and does not constitute investment advice in any form.

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Tanmai Sharma

Tanmai is the CEO and Founder of Canopy, which is an investment reporting and analytics company. Here he analyses investment trends seen in Canopy's meta-data