Market Insights from the Bramshill Investments Team.

2020 February Portfolio Commentary

Posted by Bramshill Investments Team on March 20, 2020

BRAMSHILL BLOG:  From the Desk of Bramshill Investments

LogoThe Bramshill Income Performance Strategy returned -1.41% on the month, putting our YTD return at -1.18%. February was a month in which the markets began to factor the effects of the coronavirus on the global economy as the S+P 500 Index sold off -8.23% on the month. If you recall, in recent months, the Strategy has been positioned conservatively due to valuations in the credit markets.

However, our allocation to preferred securities (approximately 39%), largely impacted the portfolio's performance as the S+P Preferred Stock Index was down -4.64% on the month. Our exposure to this sector was mitigated somewhat by two calls/redemptions which were announced by issuers: a Citigroup preferred position, which represented approximately a 4% Strategy allo-cation; and a Wells Fargo preferred position, which represented approximately a 2% Strategy allocation. These redemptions will increase our cash/liquidity position in early March. We did reduce our high yield corporate exposure from 11% to 10% of the portfolio. In particular, we significantly reduced one position in WYND bonds. According to the Bloomberg Barclays Index, US High Yield sold off approximately -1.41% in February. Therefore, this sell-off also somewhat impacted performance in February. The portfolio’s investment grade corporate exposure remained stable at 10% of the portfolio. Municipal closed end funds have begun to look attractively priced, thus we somewhat increased exposure in this asset class from 2% to 3% of the portfolio. Cash/Short-Term US Treasur-ies represented approximately 36% of the portfolio at the end of February prior to the calls (mentioned above) which will take place in March. Risk assets are in the midst of digesting headlines and repricing. We believe at this time there remains significant uncertainty about the full impact of the virus on economic activity and it could take a longer period to assess all of these risks. Therefore, we are increasing our bullpen, increasing our liquidity and risk managing the portfolio in this period of elevated volatility.

At this point we are all aware of the global events that are unfolding, predominately due to the Coronavirus. Click here for a note from our CIO regarding Bramshill's latest market outlook.


This commentary is provided by Bramshill Investments, LLC for information purposes only and may contain information that is not suitable for all investors. Certain views and opinions expressed herein are forward-looking and may not come to pass. Investing involves risk, including the potential loss of principal. Past performance may not be indicative of future results, which are subject to various market and economic factors. No statement is to be construed as an offer to sell or a solicitation of an offer to buy securities or the rendering of personalized investment advice. Stated performance is reflective of realized/unrealized capital gains/losses and investment income achieve in composite accounts, net of investment management fees and expenses for trading, custody and fund maintenance (where applicable). Returns reflect the reinvestment of dividends and other such distributions and performance for January 2009 through April 2012 depicts actual returns generated by the strategy while managed by the Firm’s Chief Investment Officer at an unaffiliated investment firm. All information is accurate as of the date of publication and is subject to change without notice.

Topics: Commentary