Discretionary Trading Q1 2021 commentary

SaxoSelect Commentaries
Instruments tradedFX spot and CFDs
Asset classesFX, equity indices, commodities, government bonds
Investment styleDiscretionary (non-systematic), volatility, opportunistic
Quarterly return2.25% (net of all fees)
Annualised return volatility (since inception)35.2%
Average trades per week (since inception)

Market overview

Economic recovery hyper-charged by record fiscal stimulus, continuing monetary support and vaccine rollout success in some key countries led to another quarter of equity prices rise, strong rally in commodities and steep rise in bonds yields. Move in yields, on the basis of inflation fears and fiscal deficit, was one of the steepest in the last decade and had repercussions in equity sectors as more duration sensitive big tech suffered 12% correction in February-March, before returning to highs. 

Strong USD performance can be traced to yields rise and global competitiveness of US yields in bonds portfolios. Currency performance is also connected to timing of vaccine rollout and epidemic control as in Q1, both the USA and UK led the process while continental Europe lagged behind resulting to different pace of economic recovery. The long term trend for the USD post pandemic remains however on the crossroads. 

Perhaps the most notable development in Q1 was the meteoric rise in cryptocurrencies that doubled in prices and raises the question: is it a bubble or a new breakaway investment alternative.

Strategy performance (net of all fees)

Since launch of partnership with Saxo Bank (September 2015)

It was a quarter of flat performance for the strategy. The strategy manager chose to dial down the strategy’s risk appetite a bit which unfortunately led to a number of notable missed opportunities. Otherwise the strategy manager navigated both long and short equity moves that contributed to positive but flattish performance.

Best-performing positions

  • DAX index long. Powerful rally that benefited from the rotation into global cyclical names, geared to manufacturing recovery. Contributed 2.5% to the strategy’s performance.

  • SPX S&P 500 Index long and short positions navigating Q1 movements. Contributed 1.5% to the strategy’s performance.

  • NASDAQ 100 Index short positions that captured some of the movements during the volatile correction period. Contributed 1.5% to the strategy’s performance.

Worst-performing positions

  • GBP USD long position. Difficult execution in the crosscurrents of positive GBP momentum and somewhat surprising revival of the USD. Contributed -1,5% to the strategy’s performance

  • Russell 2000 Index short. Continued rotation in equity markets since November has been a detractor to performance and changed the changed the character of this index. Traditionally geared to domestic cyclical recovery, heavy on yield sensitive financials, the index is now full of high flying, no income tech names which is not easy to navigate in the current environment. Contributed -1,5% to the strategy’s performance.


The strategy manager believes that the strategy will continue to cruise in low volatility range for a while. Sizable performance capitalization will occur when  notable trades are identified and properly executed on. 

There is a potential for continuing rise in yields and bond trades, maybe leading to another tradable correction in tech. On the other hand, markets may have exaggerated reopening and recovery impact but that may be more of a H2 matter. 

On the currency front, the strategy manager is waiting for sustainable trends. Post pandemic new normal remains highly uncertain and it is difficult to ascribe high confidence to any scenario. Execution remains key to performance.


Saxo Markets provides personal portfolio management via its SaxoSelect service. Before entering any managed portfolio, we must first take into account your investment objectives, goals and financial situation. 

This material should be considered as a marketing communication under the Financial Conduct Authority’s rules. Saxo Capital Markets UK Limited (SCML) undertakes reasonable efforts to ensure that any information published in this communication is reliable. SCML makes no representation or warranty, and assumes no liability, for the accuracy or completeness of any information contained in this communication. 

Investing in financial products always involves risk. As a general rule, you should only invest in financial products if you understand the risks associated with them. Investing in a portfolio with currency that differs from the base currency of your account carries the risk of exposure to changes in the rate of exchange between them. See the full Managed Portfolio Disclaimer for more information. Past performance is not a guide to future performance.

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