March 2012
The Global Guru Capital Investment Programs were flat in March. The “Ivy Plus” Investment Program rose 0.22% and the “Global Gains” Investment Program fell 0.77%.
“GLOBAL GAINS” INVESTMENT PROGRAM
DEFENSIVELY POSITIONED
The “Global Gains” Investment Program fell 0.77% in March. The program’s weighting in emerging markets -which fell over 3% this month -and the poor performance of highly volatile bets on European banks, weighed on this month’s performance
The program’s two core defensive bets were both negative. Gold dropped another 2.69% while emerging markets debt fell 0.53%. Our bet on “Asia’s Las Vegas” rose 4.84%.
I’ve noted particular weakness in the commodities and energy sector. I’ll continue to sell these off in the coming month in favor of more technology oriented plays. I also expect to enter particular high performing emerging markets, as these come back into favor among investors.
THE “IVY PLUS” INVESTMENT PROGRAM
FLAT MONTH
The fully-invested “Ivy Plus” program had a flat month, rising by 0.22%. Most asset classes in the program fell this month in stark contrast to the two previous months.
Overall, the “Ivy Plus” Program is up a solid 9.70% on the first quarter of 2012. The top performing asset classes in the first three months of the year have been private equity (+18.65%), international real estate (+ 15.68%) and timber (+13.91).
U.S. real estate and the broad U.S. stock market were the top performers during the month, rising 4.3% and 2.63%, respectively. Private equity came in third, with a gain of 1.5%. Both developed markets and international real estate eked out small gains of 0.37% and 0.93% each.
Emerging markets were the worst performer of the month, falling 3.09%.
Fixed income positions lagged with Treasury Inflation Protected Securities (TIPS),Treasuries, foreign bonds and High yield bonds all falling slightly.
Hedge funds had a negative month. The long-short hedge fund strategy dropped 0.22% and global macro fell 1.66%.
INVESTMENT OUTLOOK
CAUTIOUSLY OPTIMISTIC
Although the U.S. market continued to rise in March, the performance of several other asset classes in the investment universe was noticeably weaker. The volume of trading in stocks both in the U.S. and globally remains low by historical standards. A handful of U.S. stocks -foremost among them Apple- have accounted for the bulk of the advance in U.S. market averages.
That said, the relatively flat performance of many asset classes in March allowed the market to digest some of its large gains of January and February.
As a result, I may take on additional risk in the “Global Gains” portfolio and add several new positions in the coming month.