The Escudo strategy has done relatively well in the high market volatility. YTD its up 2.2% vs. SP500 -14% and NASDAQ down 23%. I have focused on the energy, diversified financials, raw materials, and consumer staples sectores for most the year and have recently added what I consider value tech, Amazon, Adobe, Google, Microsoft and Cybersecurity ETF as well as China exposure. The rational is that these very high-quality industry leaders with fortress balance sheets have corrected substantially and worth an initial position. (See below full portfolio)
The LNG (transport, regasification) and Bulk shipping sector has been very solid along with the oil/energy sector that should continue to perform well as China reopens and looks to ignite growth pre–October CCP meeting. Which is why I added China exposure.
The strategy has a 4% dividend yld and 15x PE, not extreme value as I believe much of the Fed rate normalization has been priced in. Key will be inflation readings in coming months. A noticeable break could trigger bond buying, especially in the corp and high yld area. The opposite would prompt me to go short the TMV as long rates may have further to go.
I’m searching to add positions in EU Financials as the ECB looks to raise rates. The Santander position is less concentrated in EU due to its Latam exposure.
Neste , the Biodiesel producer and SQM (lithium) could run and I may add to positions tactically.