Month in Review – March 2017

By April 5, 2017Month in Review

Ah, March for the Australian investor. What a beautiful time to be in the markets. Just close enough to the New Year for the Christmas rally to be a fond memory and just far enough away from the “Sell In May & Go Away” crowd to start getting on their soapbox.

Not only an up month for the ASX 200 (2.67%) but also for us.
Key standout was the impeccably well-timed ‘shorting’ of Harvey Norman. Credit where it’s due and I’d love to take ownership of this trade since my feelings towards HVN are well known. However a tip of the hat to Martin, Michael and Kieran on the Investment Committee who saw the HVN chart deteriorating and took immediate action.

Timing like this is an art form. Well done, gents.

Growth Portfolio 

A few takeaways from this:
First and foremost the method used was not the actual “shorting” you have heard so much about in the press this month. To do that you need to open a “short” account and link your bank account with a certain minimum as margin. After that we need to talk to our back office team’s stock-loan desk and see if they have any stock to borrow that can be borrowed and shorted. Actually shorting a stock is timely and clunky.
Easier than that is to just buy a warrant that is levered in such a way as to go up when the price of the stock goes down (and vice-versa, obviously). It’s quick and easy and is one of the advantages of trading with the VFS team who have an expertise in different products.

Secondly, due to the time restraints of this trade (the sell signal was initiated on Friday afternoon) the clients in our Managed Account (MDA) product were the only ones able to be put into this warrant and receive the maximum benefit of the HVN correction. There are so many opportunities like that which clients in our MDA are able to be put into quickly that it’s worth seeing if the MDA is right for you.

Please talk to your adviser for more information.

All the best,

James Whelan & the VFS Investment Committee 

t +1300 220 360  | m +61 407 958 036 |  www.vfsgroup.com.au


Disclaimer: 

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