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Discretionary Trading Q2 2021 commentary

SaxoSelect Commentaries
Instruments tradedFX spot and CFDs
Asset classesFX, equity indices, commodities, government bonds
Investment styleDiscretionary (non-systematic), volatility, opportunistic 
Quarterly return1.4% (net of all fees)
Annualised return volatility (since Sept 2015)26.4%
Average trades per week (since start of strategy)

Market overview

Equities continued to rise in Q2 although in a highly rotational fashion where there is a lot of action in particular names or sectors but much less on an index level and with a lot of dispersion between indexes. 

There was notable correction in the back end of the earnings season, especially in technology names but otherwise equities performance was strong in April and from the second part of May into June, which was surprising as during this period there was more evidence of growing inflation in the USA, a change of tone at the Federal Reserve, with imminent tapering of stimulus and the arrival of the COVID Delta variant underscoring a longer and messier end of the pandemic.

Stronger performance despite bad news is less of a reflection that market participants are comfortable with inflation and growth prospects, but more a reflection that markets are driven by flows, especially from the retail side. This might mean that we are in a phase of the cycle with high level of misallocation of capital.

Bonds paint a different picture with falling yields and assumptions that growth is transitory, inflation will lead to a reaction from the FED and even more problems with growth. Commodities lost momentum in Q2 either because of a counter reaction from China releasing inventory reserves, or due to the realization that reopening is a peak growth moment. Currencies remain muted but USD is much stronger than expectations for this year.


Strategy performance (net of all fees)

Since launch of partnership with Saxo Bank (September 2015)361.9%

The strategy execution was good until mid-May where performance peaked at around 10% gain for the quarter, after capturing the correction in equities and reflation moves in commodities, only to give it back in the second half of the quarter, ending in flattish performance for Q2. 

From mid-May, markets reaction to shocking CPI inflation reads (5%y/y, 10% annualised 3 month gain) and Fed communication on imminent stimulus tapering, were misjudged, especially on the equities side. Lastly, even though USD predictions were right, the execution was not, with choppy market, confusing short term patterns.

Best performing positions

  • Gold June. Contributed 3.5% to the strategy’s performance.

  • NAS100 June. Contributed 3.1% to the strategy’s performance.

  • SP500 June. Contributed 2.8% to the strategy’s performance.

Worst performing positions

  • NAS100 June. Contributed -3.2% to the strategy’s performance.

  • NAS100 Sep. Contributed -2,5% to the strategy’s performance.

  • AUD USD. Contributed -1.8% to the strategy’s performance.


There is a lot of uncertainty in the market. Questions remain whether rising inflation is  good or bad for equities, and if inflation is only a transitory problem or will require a monetary policy response with big repercussions in the markets. Further questions remain whether  the reopening of the growth phase is transitory and if the covid pandemic is improving with the vaccine roll out. Combined with the erratic nature of short term and inter market patterns, the upcoming months remain a challenging environment.

The strategy provider is going into the next quarter with eyes wide open and constantly assessing the market and its signals to capture profitable opportunities. 


Any information found in this document, including performance information and statistics are subject to change. You can find the latest updated pricing information on the description page for each available portfolio. In providing this material Saxo Bank has not taken into account any particular recipient’s investment objectives, special investment goals, financial situation, and specific needs and demands and nothing herein is intended as a recommendation for any recipient to invest or divest in a particular manner and Saxo Bank assumes no liability for any recipient sustaining a loss from trading in accordance with a perceived recommendation. All investments entail a risk and may result in both profits and losses, and all capital is at risk. In particular investments in leveraged products, such as but not limited to foreign exchange, derivatives and commodities can be very speculative and profits and losses may fluctuate both violently and rapidly. Speculative trading is not suitable for all investors and all recipients should carefully consider their financial situation and consult financial advisors in order to understand the risks involved and ensure the suitability of their situation prior to making any investment, divestment or entering into any transaction. Any mentioning herein, if any, of any risk may not be, and should not be considered to be, neither a comprehensive disclosure of risks nor a comprehensive description of such risks. Any expression of opinion may not reflect the opinion of Saxo Bank and all expressions of opinion are subject to change without notice (neither prior nor subsequent).

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