Options Portfolio results for April 2010

[ Tuesday, 11 May 2010 ]

A steady month
Options Portfolio results



Options Portfolio results for April


The Options Portfolio continued the “slow but steady” trends of recent months, with 1.17% after
tax for April.

For the year it returned 22.64% after tax, 3 years 7.36% pa and since inception 9.56% pa.

During the month the US 10-year rate fluctuated between 4% early in the month, trending down to around 3.65%. There were two main reasons for this:

Firstly, the US was the beneficiary of the well-publicised debt problems in the EU and in particular Greece. Spain’s credit rating also dropped and there is the potential for debt problems with Spain
and Portugal. As a result there was a “flight to quality” by nervous investors, seeking a safe haven in US debt markets. This increased demand resulted in yields dropping.

The second factor was more US-specific. During April the US Federal Reserve in effect said that it had no plans to push up interest rates anytime soon because they did not view inflation as a
problem. This took the pressure off short-term rates. As a result longer-term bonds started looking more attractive, again stimulating demand for them and reducing the yield.

Tyndall expects these themes to continue through May.

Options portfolio - how it works
Options portfolio - performance graph




11 May 2010

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