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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. 


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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