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Multi-Strategy Model: November 2023 +6.4%, YTD +13.1%

MARKET BRIEF


It seemed like a never-ending swim in a sea of blood in the last few months. But November brought about a refreshing change. In fact, change is an understatement. A dramatic reversal was more apt. Most asset classes except for commodities rose and many surged strongly. S&P 500 gained over 9%, wiping out what it lost consecutively over 3 months from August to October in just 1 month. Treasuries and REITs also jumped more than 9% and 12% respectively this month. Again, these highlight how volatile markets can be.


Asset Class Performance (November 2023)

What kicked off this powerful rally was the softer-than-expected tone conveyed at FOMC when the month started. The market did a U-turn and ramped up strongly in the days following the meeting. Yields all dropped across the curve and were particularly pronounced for the mid to long end.


Yield Curve November 2023 vs October 2023
Yield Curve November 2023 vs October 2023

This resulted in some Fed members and Jerome Powell coming out to make stronger statements in a bid to contain the euphoric sentiments that might put their progress against inflation in jeopardy. This flip and flop, however slight, did not escape the markets. It seemed that the FOMC prefers to avoid hiking any further as that will risk tilting the economy down from a soft-landing scenario they are trying to engineer.


What they are attempting to do now is to use words and influence to manage the expectations and keep the yields across the curve roughly where they are to exert the pressure against inflation. But with recent economic data pointing to growth and inflation slowing, the market took all these to mean that at the very least rates have peaked. Short covering, bargain hunting, and your seasonal Santa Rally probably played a part in this month’s rally. It will be hard to suppress euphoria with empty words alone.


PORTFOLIO UPDATES

AQ Multi-Strategy Model NAV
AQ Multi-Strategy Model Monthly Performance
AQ Multi-Strategy Model Allocation

Our multi-strategy model portfolio did well this month. Even though we had a slightly reduced allocation to equities this month, we ran a higher weighting in the technology sector through SPY and XLK which were top equity sectors for the month. Our higher allocation to long-term Treasuries in TLT also benefitted greatly this month as yields dropped and bonds saw a strong rebound. Our short volatility position through SVIX which we closed out at a profit intramonth also recouped its losses sustained over the prior 2 months and continued to make new highs. Collectively, these positions more than make up for the underperformance in DBC (Commodities).


Overall, the multi-strategy model is up +6.4% for the month and +13.1% YTD.


Download our AQ Multi-Strategy Model Newsletter

2023-11 AQ Multi-Strategy Newsletter
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* This is the model performance of portfolios constructed using more advanced strategies than those taught in our courses. They can be implemented with the assistance of an iFAST Global Markets (Singapore) senior investment adviser. Note that live performance may vary due to execution price slippages, the difference in sizing precisions, etc. All performances are measured in USD terms.

 

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We are not financial advisers or fund managers. The information published on this Site is provided for informational purposes only. It is not intended to be, nor shall it be construed as, financial advice, an offer, or a solicitation of an offer, to buy or sell an interest in any investment product. Nothing on this site constitutes accounting, regulatory, tax, or other advice.


Any performance shown on this Site is model performance and is not necessarily indicative nor a guarantee of future performance. You should make your own assessment of the relevance, accuracy, and adequacy of the information contained on this Site and consult your independent advisers where necessary.


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