April 17, 2022

Protection in times of rapidly rising inflation

Last Updated on April 17, 2022 by The New Belgian Dentist

Q1 results of our TopMomentum portfolios are shown in the graphs below. We see these portfolios offered a good protection in the climate of rapidly rising inflation and intrest rates. Halfyearly and yearly rebalancing (returns equal at this moment of the year) results in slightly less good results, although transaction costs are lower. As can be expected, this is because strategies with longer rebalancing periods, react more slowly to sector rotations. With monthly and quarterly rebalancing our portfolios consist of many energy-related stocks. As a consequence these portfolios are not strongly diversified. That should not be too big a problem, since with new sector rotations the constitution of these portfolios will change again.

Figure 1. YTD of R1n25 TopMomentum portfolio in the first quarter and first half of april 2022. Huge outperformance relative to S&P500.
Figure 2. YTD of R3n25 TopMomentum portfolio in the first quarter and first half of april 2022. Huge outperformance relative to S&P500.
Figure 3. YTD of R6n25 TopMomentum portfolio in the first quarter and first half of april 2022. Huge outperformance relative to S&P500. Little worse relative to monthly and quarterly rebalancing.