This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The value of active management in an up market

By Seckel Capital Advisors

The second quarter of 2014 was strong for the Select Sector Plus portfolio. The strategy benefitted from the volatility position added in April as well as full exposure to equities for the entire quarter.

Total return for the quarter was +25.79% compared to the S&P 500 Total Return Index returning +5.23%. A breakdown of the strategy's performance and risk analysis are shown on the table below. The second quarter of 2014 is a good example of how our actively managed strategy can provide significant outperformance in up-markets, which we believe is a great value. We always aim to deliver risk adjusted returns across multiple market cycles.

Seckel Chart 1

Domestic Equity:

The domestic equity market was up +5.23% for the second quarter of 2014. There were two outliers relative to the market and the other sectors which are worth noting. Financials (XLF) was a clear underperformer for the quarter with a +2.20% return and energy (XLE) posted a large gain of +12.92%. Our strategy signaled a fully invested position in every domestic equity sector for the second quarter as each was in a clear uptrend with low levels of volatility.

Volatility for the market and each sector individually has drifted lower in the second quarter. Although the VIX has been at levels not seen since 2007; implied (forward looking) volatility relative to realized (historic) volatility remains fairly consistent to historic ratios.

Our allocation to volatility as an asset class was a large piece of our outperformance this quarter; these types of environments can be opportunities for our portfolios to appreciate substantially. Risk management is paramount when allocating to volatility and we can move to a neutral (cash) position quickly if need be. Market environments like the second quarter are optimal for our strategies and we'd expect to see substantial outperformance relative to the S&P 500 in those times.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

Chart of I:DJI
DOW 17,598.20 -91.66 -0.52%
S&P 500 2,098.04 -5.80 -0.28%
NASDAQ 5,115.3820 -12.8990 -0.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs