Portfolios: situation at 01.02.2025

THE Determinant portfolio concludes January with a handsome gain of 2.05% (in CHF). The PP 2.x did even better, with 3.83%. Despite these fine performances, they were clearly outperformed by the MSCI Switzerland, which broke the bank with 8.25%! It has to be said that the latter has come a long way since a rather miserable 2024.

Past month's performance (portfolios and benchmarks - in CHF)

• Wallets :
  • Determinant portfolio : 2.05%
  • PP 2.x : 3.83%
• Benchmarks :
  • MSCI Switzerland: 8.25%
  • S&P 500 : 3.06%
  • VT : 3.43%
  • 60/40 "Boglehead : 2.57%

The PP 2.x posted an excellent result for the month of January. Admittedly, it lagged far behind the MSCI, which benefited from a catch-up effect. However, the PP 2.x outperformed all other benchmarks, which were already rising strongly.

Like the Swiss index, stocks of international companies outside the USA were on a roll in the first month of the year. It has to be said that they too lagged somewhat behind last year, with a performance half that of the S&P 500. This rebound is reflected in January by a better result for VT than for SPY, which has also pushed the 60/40 "Boglehead" upwards.

Micro Caps, on the other hand, followed the opposite path. Particularly popular last year, they fell back into line in January, weighing on the results of the Determinant portfolio. Only time will tell if this is just a fleeting pause. We'll be following this closely over the coming months.

A one-month performance of over 2% for the determining portfolio is in any case a very good result, even if the other indices did better. Let's not forget that one of its characteristics is its volatility relatively low correlation with the market (see below).

Key portfolio strategies (past month - in CHF)

• Blue Chips: + 2.39%
• Micro Caps: - 1.65%
• Trading Auto Signal : +5.43%
• Gold: +7.18%
• Swiss bonds: -0.62%
• Real estate Swiss: -1.19%

The Blue Chips are back on track. As you'll recall, they too lagged somewhat last year. It's worth noting that I underweighted this strategy in January because, with almost 50% of assets, it weighed too heavily in the overall results. Today, it is close to a quarter, which is closer to the other strategies. This should benefit the portfolio's Sharpe ratio.

Auto Signal trading and gold had a fine January, while Swiss bonds remained in line.

Swiss real estate, like the Micro Caps, is marking time after a very good 2024. To be continued.

Portfolio statistics

The key portfolio in in its new configuration since October 2024shows the following results (in Swiss francs):

• Annualized performance (%): 24.6 (MSCI Switzerland: 9.16)
• Max Drawdown (%) : -2.84 (MSCI Switzerland: -7.99)
• Standard deviation (%): 10.31 (MSCI Switzerland: 11.41)
• Sharpe ratio: 2.01 (MSCI Switzerland: 0.63)
• Correlation with MSCI Switzerland: 0.49

New Long/Short strategy

Like mentioned recentlyI'm planning to introduce a new strategy to the key portfolio. For some time now, I've been looking for a way to further hedge my positions against a bear market. The fall in stock market indices (due to DeepSeek), a day after I announced this new approach, confirms my choice.

Unlike Auto Signal Trading, which is bearish only when the market is bearish (and it's been a long time since that was the case), the Long/Short strategy has a slight short bias at all times, allowing the rest of the portfolio to be subtly hedged. If exposure remains discreet, it's because the portfolio is already designed to weather storms, through the judicious selection of low-correlation and/or low-volatility assets.

As mentioned in my postI plan to gradually introduce this strategy from March onwards. I've already backtested it quite a bit, and still have a few practical aspects to sort out in order to implement it properly. If my work progresses faster than expected, it's possible that I'll anticipate its introduction somewhat. Or perhaps market developments will prompt me to put my foot on the gas pedal...

Another new feature

As part of the revisions to celebrate the site's 15th anniversary, scheduled for next December, I've decided to remove advertising since the end of January. This has been on my mind for some time. On the one hand, the revenue generated by advertising covers the platform's operating costs, but on the other, it detracts from the overall user experience. With this initiative, I also want to contribute to the fight against Rat Race.