Monday, October 10, 2011

UDC Portfolio Q3 Results

At the end of this turbulent third quarter, CCI must report that the Utility Dividend Capture fund (description here) lost 2.0% this quarter. This is the first loosing quarter in the funds 9 quarters of existence, and hence the first time the fund has failed to meet its absolute return objective of 0% per quarter in down markets and 3% in up markets. 

The fund once again generated significant dividend income (6.85%), as planned. Unfortunately, this is the first quarter that the anticipated capital loses were not able to be kept less than the dividend income (-8.89%).

Of course the S&P 500 was down about 13.9% (fter dividends) over the same period, so the draw down was much less than that traditional benchmark. However, the utility sector ETF (XLU) still managed to eek out a 1.4% gain this quarter. Hence that would have been a better, simpler way to go this quarter.

While the fund failed to meet its idealistic, arbitrary quarterly objective (maybe I should change the objective to -2% in down quarters, ...lol) it still obviously avoided a big down draft which is perhaps the most critical element to achieving good long-term performance. Additionally, UDC is the least volatile of these three funds. (as measured by SD).

CCI plans to continue with this approach both for its return profile and to illustrate how disciplined approach might work. Below is a lot of performance data so the reader can judge for themselves the merit of this approach.


RETURNS
UDC
DIV.
UDC CG
UDC
TOTAL
XLU
S&P500 (DSPIX)
2009 q3
7.73%
-2.86%
4.87%
6.26%
11.43%
2009 q4
8.22%
-4.29%
3.93%
7.02%
6.02%
2010 q1
8.10%
-5.93%
2.17%
-4.38%
5.36%
2010 q2
7.98%
-7.89%
0.09%
-3.68%
-11.39%
2010 q3
5.53%
1.08%
6.61%
12.16%
11.24%
2010 q4
5.62%
-3.25%
2.37%
1.05%
14.80%
2011 q1
5.95%
-3.34%
2.61%
2.69%
5.90%
2011 q2
5.96%
-0.39%
5.57%
6.10%
-2.10%
2011 q3
6.85%
-8.89%
-2.04%
1.44%
-13.89%









Compound Return




29.09%
31.24%
25.74%
Standard Dev




4.4%
4.9

9.1


Correlations between these three funds are shown below.
  • udc/xlu .74
  • udc/spy .67
  • xlu/spy .43



TRADE STATS
Trades
Wins
Loses
Win %
2011 q3
20
13
7
65.00%
Total
165
122
43
74.00%

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