It is fair to say that in what was our inaugural first quarter as a regulated entity, that we have been exceptionally pleased with the positions we have taken and how these have panned out. We veritably knocked our benchmark into a “cocked hat”. This is all the more satisfying in that we have achieved this with tempered leverage. In short, what could go right did, although we would caution that investors should not expect this magnitude of returns every quarter!
We started the period with an overweight position in gold and related stock plays, in particular the gold miners – an area that we believed and continue to believe offers a generational buying opportunity. Throughout the first 8 weeks of the quarter, the best performing sector globally was in fact the gold miners and we traded this well, steadily taking profits as the market got overextended and using options to generate useful additional premium. Indeed, some stocks doubled during this period and we took the opportunity to recycle some of these profits into the various themes below. We remain long those stocks however that we continue to have high conviction in with regards to their fundamental value. Additionally, from a diversification perspective, we also increased our position in the ETF gold mining plays as the quarter ended, believing this to be the most effective way to play the re-rating story here that we expect to unfold over the next 12-18 months.
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