Opium War Trade

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Jardine Matheson

This is one of the most complicated publicly traded companies

Still dominated by a single family.

Dates back to the 19th century, exploiting the Chinese in the opium trade and all sorts of other businesses.

Has a lot of attractive holdings in Asia and Europe.

Astra, Mandarin Oriental, Hong Kong Land, Dairy Farm, Rothschilds, Jardines Motors, etc…

Probably trades at a big discount to NAV

Hard to unlock value due to ownership structure.

Down low teens for the year.

Yields over 2%

Equal weight etfs vs Index etfs

SPDR® S&P 500® ETF (SPY) vs Rydex S&P Equal Weight ETF (NYSEARCA: RSP)

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RSP – all the index constituents weighted equally

higher management fees (40 bps vs 10 bps)

SPY – market cap weighted (i.e. AAPL is over 3%, XOM 2.6%)

Dividend yield about 2% for both

Sector weightings are different

The difference in the performance of the equal weight Nasdaq etf vs the Nasdaq 100 etf is even more stark once the AAPL started to underperform the market. YTD the First Trust NASDAQ-100 Equal Weighted IndexSM Fund (QQEW) is outperforming the QQQ by close to 600 bps.

Over time the equal weight etf will outperform the index etf because of the large cap bias.

DoubleLine Income Solutions Fund (DSL)

Investment Objective
The Fund’s investment objective is to provide a high level of current income and its secondary objective is to seek capital appreciation.

The Fund may invest in debt securities and other income-producing investments anywhere in the world, including in emerging markets.

Trades at about a 4% discount to NAV

Currently yields $0.15 monthly but is subject to change at any point

1% management fee

World’s best fixed income manager for a relatively small fee

Very sensitive to moves in interest rates

 

Current allocation:

  Sector Breakdown
Mortgage-Backed Securities 22.2%
Emerging Markets 44.1%
High Yield Corporates 19.8%
Bank Loans 11.2%
CLOs 2.7%
Total 100.00%

Global X Top Guru Holdings Index ETF (NYSEARCA:GURU)

Pros:

  • Best long ideas from long/short, activist and long biased hedge funds based on 13f filings. 
  • Relatively low expense ratio.
  • Equal weighted
  • Diversified well. Mostly solid companies already.
  • Relatively high yield

Cons:

  • 13f filings could be stale
  • Highly correlated with the market
  • Illiquid and only about 120mm in net assets