Optarix US Portfolio February 2018: Active Return +5.07%

Feburary 2018 turned out to be a very volatile month. After a very long period of new highs each month the US stock market saw wild swings and are down for the month. They are still up year-to-date, though.

The Optarix US portfolio is up year-to-year by 19.89%. However as always this number is not what we focus on. Instead we look at our benchmarks, which are the S&P 500 index and the S&P 500 Dividend Aristocrats index. The S&P 500 is up 14.82% year-to-year while the S&P 500 Dividend Aristocrats is up by 11.89%. This means that our portfolio had an active return of 5.07% compared to the S&P 500, and of 8.00% over the S&P 500 Dividend Aristocrats. Active return is the additional return that a portfolio produced compared to a benchmark.

Of course, it is possible that we just got lucky with our selection of stocks. There are reports that a monkey throwing darts at the news paper page with the stock quotes does as well as the average active fund manager or stock picker. We also need to keep in mind that the results for a single time frame are not statistically significant. Instead we need to look at multiple time frames.

We started the Optarix US portfolio in January 2017 based on decades of investment experience. For the US portfolio now we have data for three 12-months periods. Admittedly, they overlap but as we add one data point each month we expect the numbers to establish a trend as time goes by.

The active returns (i.e. the additional gains) over the S&P 500 are as follows:

• 12 months ending December 2017: +4.31%
• 12 months ending January 2018: +3.96%
• 12 months ending February 2018: +5.07%
• Average of these three months: 4.45%

Please be aware that past results do not guarantee future results. We believe, though, that with our set of simple rules, discipline and a long-term investment time frame, the Optarix US Portfolio is well positioned to generate returns similar to our benchmarks. For the last 10 years the S&P 500 returned about 9.51% per year while the S&P 500 Dividend Aristocrats increased by about 12.36%. Going forward, if we continue to manage creating a positive active return, then the Optarix US Portfolio might be able to even beat both benchmarks long-term.

Happy investing!

Disclosure: We have no plans to change any existing position in our portfolio or start new positions within 48 hours after publishing this post.