The fund took advantage of the correction on the stock markets to slightly increase its net equity allocation, which, at 19 February, was 34%, up from 30% in mid-January.

Review of 2009 and 2010 strategy.

As at beginning of November, the fund's net equity weighting is 28% (51 minus 23% hedged through the sale of futures). 

In the following, I try to answer some of the main questions people have posted on the blog in the past few months.

As at beginning of October, the fund's net equity weighting is 27% (46% minus 19% hedged through the sale of futures). The equity allocation has slightly increased compared to early September when it stood at 22%.

We have taken advantage of the rise in stock markets over the last 2 months to reduce the equity allocation in the BL-Global Flexible fund even further.

As I mentioned yesterday in my article in the "Analysis" section of the blog, I believe that the expectations of economic recovery behind the rise in risk assets since March will be short-lived.

The rise in long-term interest rates has been used to increase the weighting of bonds in the portfolio to 47%.

In the main asset classes – equities and bonds – a passive buy-and-hold strategy is likely to produce disappointing returns in the years to come.
 
In bonds, the great bull market that started in 1982 seems to be over. The inflationary environment of the 1970s saw bond yields soar and by 1982, they had risen to record levels. The subsequent decline in inflation has resulted in long-term interest rates falling and bond prices rising.

Investment strategy - Equities

Based on a set of potential scenarios, a range of 600 to 1,000 has been established for the Standard & Poor’s 500 index in the United States, the idea being to increase the equity allocation at the bottom end of the range and to decrease it at the top end.