Monthly Archives: February 2015

Rebalancing, the successful investment strategy

Is it worth rebalancing or not? It is usually said that a regular rebalance let investors deal better with the market volatility, avoiding the worst effects of sudden negative movements. Rebalancing means capital preservation as the focus of every investment strategy.

In T-Advisor, we apply systematic rebalances every second month for our model portfolios in order to avoid possible losses and improve the performance. Let’s take an example with our Germany stocks model portfolio.

T-Advisor Germany model portfolio main figures

Main figures say that 1-year-return is 34.45%, which is a very nice performance. But this result was only possible to reach with the right tools to select the assets and the regular rebalances. First of all, the portfolio has 10 different assets to diversify the investment. But let’s have a look if we compare the portfolio evolution with the reference indexes. How? With our smart benchmark.

In T-Advisor, you can clone all model portfolios to include them in your investments. If we do it now, we obtain the following results:

Rebalancing: comparative performances

As we have just done the cloning, there is no YTD figure. Smart benchmark is our composite figure that takes into account the proportion of your assets in every benchmark, as we already explained in this blog. Figures say that our portfolio overperformances the smart benchmark. But the system also offers a simulation for the last month:

Comparative chart in T-Advisor

The portfolio has always overperformanced the smart benchmark since last rebalancing on February, the 9th.

If we look it in another way: DAX has on February, 25th, 2014, a level of 9,699.35 points. On October, 15th, the worst day in the year, the level was 8,571.95. To sum up: -11.62%. What happened with our Germany portfolio in the same period? – 10.37%. And what about yesterday? If we compare the whole year, DAX has grown 15.53%, while our Germany portfolio has done 34.45%. As you can see, it’s worth doing a rebalance.

In our case, our system works to find the best assets filtered by our scoring criteria. Every two months, we analyze the assets that work and don’t to create a new successful mix. Our methodology let us say that none of our ETF model portfolios, for instance, has never negative 1-year-returns.

Market opportunities by T-Advisor: Bradesco

T-Advisor, through its tool Market Opportunities, has detected the company Bradesco, listed in Sao Paulo Stock Exchange, as an opportunity for investment.

These are the main figures about performances and volatility in the last years:

Bradesco main figures in T-Advisor

The chart shows the evolution in the last year:

Bradesco chart in T-Advisor

The technical analysis reveals also more data:

Bradesco technical analysis in T-Advisor

Finally, the risk analysis is as follows:

Bradesco risk analysis in T-Advisor

Bradesco is the second largest bank in Brazil. It has grown since the beginning of the century with several purchases and mergers. The group offers all kind of financial products, even insurances, and have branches in all municipalities in Brazil. The bank has around 17 million customers.

Bank financial margin has increased 45% in the last five years, till R$ 43.2 bn, although this figure stagnated between 2012 and 2013. Adjusted net income has grown 61% in the last five years, till R$ 12.2 bn, with an important increase between 2012 and 2013 (+5.9%). The share registered a minimun in February 2014, but since then the price grew and now it is 41% higher.

Ranking T-Advisor: Our best stocks and funds in February

What stocks and funds were the best in the February? T-Advisor publishes its ranking taking into account the score. T-Advisor patented score provides an asset rating (bullish, neutral or bearish) based on key performance indicators and technical analysis.

The best shares in February has been as follows:

Company Score Perf. YTD Volatility Weekly VaR Market

USA

Hospira

10

42.85%

17.74%

-3.14%

NYSE
MeadWestvaco

10

21.78%

20.07%

-4.02%

NYSE
Forest City

10

19.57%

19.75%

-3.5%

NYSE
NewMarket

10

16.37%

17.67%

-5.3%

NYSE
Constellations Brands

10

16.25%

21.14%

-3.95%

NYSE

EUROPE

Teleste Oy

10

36.81%

24.43%

-4.03%

Helsinki
Amanda Capital

10

35%

26.77%

-3.27%

Helsinki
Virbac SA

10

31.38%

26.91%

-6.49%

Euronext Paris
Lab Farmaceuticos

10

27.96%

20.43%

-4.79%

SIBE Madrid
Syzygy

10

26.49%

24.38%

-5.35%

Xetra

ASIA

Sundrug

10

21.17%

29.39%

-5.19%

Tokyo
Fosun International

10

19.48%

26.29%

-6.52%

Hong Kong
Q.P.Corp

10

19.41%

25.31%

-3.57%

Tokyo
Mabuchi Motors

10

18.91%

30.10%

-5.64%

Tokyo
Central Japan Railway

10

18.21%

29.57%

-5.74%

Tokyo

LATAM

Edelnor

9.94

15.25%

18%

-3.65%

Santiago de Chile
Banmedica

9.91

14.35%

31.36%

-4.29%

Santiago de Chile
Sonda

9.83

7.93%

24.76%

-4.27%

Santiago de Chile
Grupo Aeroportuario

9.79

8.55%

20.52%

-3.87%

Mexico
Empresas CMPC

9.74

7.52%

22.53%

-4.72%

Santiago de Chile

The best funds in February has been as follows:

Fund Score Perf. YTD Volatility Weekly VaR Managing company

EQUITY FUNDS

AWF F Eu RES — Shs -I- — Capitalisation

10

17.05%

13.69%

-2.53%

AXA
Axa World Fund Aedificandi F Dist EUR

10

17.01%

13.73%

-2.53%

AXA
JPMF Funds – India A (Dis) – USD

10

8.93%

17.59%

-4.07%

JP Morgan AM
DSP BR 100-Reg Grw

9.99

6.62%

18.62%

-3.18%

BlackRock Fund Managers
Pet.Sec.RE Eur.C B

9.94

15.68%

12.05%

-2.28%

NIBC Petercam
Rf-Eurasien-Akt — Vollthesaurierungs-Anteile (Ausland) — Klasse -R-

9.88

12.79%

17.15%

-3.49%

Raiffeisen
AXA Ros Gl Sm — Accum.Units — Class -B- EUR

9.87

9.22%

14.74%

-4.31%

AXA
SISF BRIC (Braz Ru In Ch) EUR I Acc

9.86

11.21%

19.37%

-4.98%

Schroder
AXA WF Frm Europe Real Estate I CAP EUR HEDGED EUR

9.84

13.94%

12.79%

-2.42%

AXA
SISF Pacific Equity (EUR denominated)

9.83

11.99%

12.23%

-2.73%

Schroder

FIXED-INCOME

AXA WF Global Inflation Bonds I CAP HEDGED CHF CHF

9.77

0.73%

4.92%

-1.12%

AXA
Blk Rk MuniHld

9.74

0.93%

7.34%

-1.71%

BlackRock Fund Managers
AXA WF US High Yield Bonds F CAP CHF HEDGED CHF

9.70

1.51%

3.93%

-1.16%

AXA
Flaherty&Crumrine

9.68

8.30%

12.03%

-2.97%

BlackRock Fund Managers
SISF Asian Convertible Bond I Acc

9.65

2.38%

4.9%

-1%

Aviva Funds
JPMF Sterling Bond A – GBP Cap

9.65

3.27%

7.01%

-1.24%

JP Morgan AM
SISF Global Convertible Bond I Acc

9.63

2.68%

7.19%

-1.78%

Schroder
BGF Emerging Markets Bond A2 EUR

9.61

7.88%

7%

-0.97%

BlackRock Fund Managers
BGF As Tig Bd A2C

9.61

2.33%

3.13%

-0.69%

BlackRock Fund Managers
SISF As Con Bd A1C

9.61

2.16%

4.9%

-1.04%

Schroder

 

Market opportunities by T-Advisor: ADP

T-Advisor, through its tool Market Opportunities, has detected the company Automatic Data Processing (ADP), listed in Nasdaq, as an opportunity for investment.

These are the main figures about performances and volatility in the last years:

ADP main figures in T-Advisor

The chart shows the evolution in the last year:

ADP chart in T-Advisor

The technical analysis reveals also more data:

ADP technical analysis in T-Advisor

Finally, the risk analysis is as follows:

ADP risk analysis in T-Advisor

Automatic Data Processing is an American provider of business outsourcing solutions. It is a comprehensive global provider of cloud-based Human Capital Management (HCM) solutions. It was also a provider of computing services to automobile and heavy equipment dealers, but spun off those businesses in 2014. It has more than 610,000 clients around the world today.

Revenues increased last fiscal year (ended 30. June 2014) an 8.1%, till $12.2 bn. These figures have grown 37.7% in the last five fiscal years. Net profit reached $1.5 bn in FY2014, an 8.3% more, while the profit growth in the last five fiscal years was 27.9%. The share price has steadily increased 162% since August 2010.

Investment exercise: planning my retirement

How will you get incomes when you get older? Will the public retirement system collapse or will it only give a very low monthly payment? Will my health be good or will I need a lot of money to pay hospitals, drugs or any kind of assistance? There are many uncertainties for our future after we will be 65 or 67 or 70 years old. It depends on the legal retirement age in each country. That is why it is necessary to take decisions as soon as possible to preview and plan your finances for that life period.

T-Advisor investment planner helps you find a plan for your retirement. First of all, we have to answer some questions:

  • The legal retirement age and the life expectancy
  • Your current incomes
  • How much you are going to invest at the beginning and every month
  • Your income level in your retirement and how much public pensions will contribute to it

Retirement planner in T-Advisor Selected life expectancy is the lowest in developed countries. This example accepts a loss in future standard of living and low incomes from the public pension. When you design your plan, be realistic considering your chances to save monthly. Think about several scenarios, as you can repeat the plan so many times as you wish. It is important to calculate different life expectancy scenarios, as you will have to deal with longer or shorter periods with the savings that you have kept before. The younger you begin, the more chances you have to enjoy a better standard of living in the future. After you enter your own figures, our investment planner will ask you about your investment profile: are you risk lover or averse? The higher risk, the higher possible performance… and possible losses. Let’s think you are conservative and prefer lower performances but lower chances to loss your money. If you are not sure, you can answer a short test. Investor profile in T-Advisor Finally, you have a chart with the result. In this case, you have very low probability to keep the selected standard of living. The chart also considers pessimistic and optimistic scenarios. These figures are obtained through statistical calculations based on historical data. You can always set the parameters to evaluate other cases. You have also advanced settings to evaluate inflation and taxes effects. Retirement scenario in T-Advisor planner If you enter, for instance, a higher monthly contribution, your success probability changes abruptly. Retirement scenario with monthly saving change in T-Advisor Last screen shows you a possible allocation of your initial contribution to your investment plan with a projection about highest annual gains and losses. Retirement plan proposal in T-Advisor Saving means to give up current consumption to keep money for future events. Future is always uncertain, but the future of retirement is more uncertain for everybody. If you think that you can survive from your future public pension, you can maybe make a mistake. Currently, there are different products in the market, but a plan for your own needs and situation is the best solution. Our investment planner is the first step for it.

Market opportunities by T-Advisor: Aegean Airlines

T-Advisor, through its tool Market Opportunities, has detected the company Aegean Airlines, listed in Athens Stock Exchange, as an opportunity for investment.

These are the main figures about performances and volatility in the last years:

Aegean Airlines main figures in T-Advisor

The chart shows the evolution in the last year:

Aegean Airlines chart in T-Advisor

The technical analysis reveals also more data:

Aegean Airlines technical analysis in T-Advisor

Finally, the risk analysis is as follows:

Aegean Airlines risk analysis in T-Advisor

Aegean Airlines was the first private airline company in Greece founded in 1992. It is a regional airline, covering domestic flights in Greece. It is part of the Star Alliance Network, led by Lufthansa and United Airlines. The fleet is composed by 50 aircrafts, mainly Airbus.

Despite the economic crisis in the country, Aegean Airlines increased its revenues a 21% in 2013, till €682 million. Net profit turned into black figures in 2013, till €66.3 million, after the losses in 2012. The company had to deal in 2013 with losses from Olympic Airlines, a company which was purchased that year. The share multiplied its price five times since the summer 2012. Now it is near the peak reached last year in May.

Global market trends: markets in January

This year has begun with the markets playing hard rock. The list of figures and events is long and all of them have effects on the markets. Obama declared the end of the crisis, radical left won in Greece, ECB began the European QE, China grew at the lower pace since 1990… Impossible to miss!

First of all, it is necessary to take into account a point in macroeconomics. IMF reduced its world growth outlook for 2015 last month. Amongst the risks, it is found the cheaper oil prices. Why? Yes, it pushes consumption and reduces industrial costs, but it can feed the deflationary trend. Deflation is very risky, as people tend to postpone investments’ and purchases’ decisions. Current price is around $50, but the pressure from Arabian producers could push it to a lower bar.

Global market trends in January in T-Advisor

Several experts have already warned that 2015 would be an unstable year for economics. However, US President Obama said in his State of Union address to the Congress that the economic crisis was over. American economy has experienced a recovery, but Federal Reserve is still reluctant to increase rates, as it does not perceive inflation risk. Although observers tend to think that the American central bank will hike rates in summer, it is still soon to have a clear perspective about that decision with the current instability.

US global trend in T-Advisor

In Europe, the ECB did finally what many economists recommended some months, even years, ago: an expansive monetary policy printing money. The European QE will expand ECB balance in €1 trillion, but effects will take at least six months. In any case, markets make their own party, till Greeks voted the radical left party Syriza in the last election. New Greek prime minister declared his intention to negotiate the country debt, but European partners do not agree. Markets have suffered abrupt ups and downs. Another point of instability was the Swiss National Bank decision to unpeg its currency from euro, which was not expected by investors.

Europe global trend in T-Advisor

Latin America is still the weakest world region. As the IMF comments, these countries are very dependent from oil and commodities. The current negative price trend for these products is punishing the market evaluation about the region.

Latin America global trend in T-Advisor

In Asia, China registered the lowest growth (“just” 7.4%) since 1990, which can show some weaknesses in its develop. These figures have partially stopped the soared trend since People’s Bank of China reduced its rates in November. In Japan, recent election victory by prime minister Abe guarantees that his expansive economic decisions will continue, but it is to see if they have effects after 25 years of weakness.

Asia global trend in T-Advisor

 

Market opportunities by T-Advisor: Terumo

T-Advisor, through its tool Market Opportunities, has detected the company Terumo, listed in Tokyo, as an opportunity for investment.

These are the main figures about performances and volatility in the last years:

Terumo main figures in T-Advisor

The chart shows the evolution in the last year:

Terumo chart in T-Advisor

The technical analysis reveals also more data:

Terumo technical analysis in T-Advisor

Finally, the risk analysis is as follows:

Terumo risk analysis in T-Advisor

The Japanese corporation works proactively to stably provide high-quality medical devices and services for the benefit of patients and medical settings in over 160 countries, while also developing solutions to advance the practice of healthcare. It has three main branches: Cardiac & Vascular for treatments including cardiac and vascular surgery; General Hospital for improving safety and easing of use in therapy devices used in hospitals and in homes; and Blood Management systems for the high-quality, efficient collection and processing of donated blood on a global basis. Founded in 1921, it has grown since the 90s with new branches in several countries and purchases.

Net sales increased steadily in the last four years. Last fiscal year, sales reached ¥467.4 billion, a 16% more compared with the former year. On the contrary, net profit fell a 27.4%, till ¥34.1 billion, after the record obtained in the fiscal year 2013. However, the company paid a higher dividend: ¥58 per share compared with ¥44 in 2013.