Trade Update: Rolling back the hedge

After confirming all of our signposts, we made the decision to exit Flagship’s Hedge (PSQ) on Friday morning. We also trimmed our position in TransDigm (TDG) and added to several Flagship holdings as detailed in the table below.

Let’s dive in.

Rolling back the hedge

We activated our maximum hedges in January of 2022 and after the recent market rally, we have elected to exit the position. We lean heavily on technical analysis to determine our hedge timing/trades and as the Nasdaq broke through its 200 day moving average (amongst other technical indicators we follow), we’ve concluded that large-cap U.S. equity markets have a high probability to sustain this move higher. After generating positive returns for clients since we initiated them, our hedges not only reduced volatility but insulated clients from downside pressures.

We annotated this in our Offshore update and feel compelled to raise this point again: This is not us calling the bottom. Conservative clients will continue to have ~10% of their portfolio invested in the hedging vehicle (PSQ), and moderate clients will have ~5% invested in the hedge.

Right sizing across the board

TransDigm (TDG) has been one of Flagship’s strongest performers (+31% YTD) and after hitting new all-time-highs, we took the opportunity to trim the position slightly. Our thesis around recovery in aerospace remains fully intact but after organically growing to nearly 9% of Flagship’s invested capital, a trim seems prudent.  

Apple (AAPL) has proven to be one of the most resilient businesses in the world despite continued economic uncertainty and supply chain troubles. With their installed base reaching new heights and the highly anticipated launch of their VR headset approaching, we elected to take the proceeds from TransDigm and add to our position in Apple here.

In an effort to increase net exposure, we used the proceeds from our Hedge (PSQ) to add ~30 basis points to an additional 13 positions in Flagship (annotated in the chart above). This move allows us to ‘top off’ several of our highest conviction names while increasing net exposure by 7.3% for Flagship overall. We believe this move will allow us to capture more upside in an effort to drive long-term growth.

As always, let us know if you have any questions about the recent trades; we’re happy to assist.

–Your Titan Team

As of writing, AMD, ALC, AMZN, AAPL, XOM, MSFT, GOOG, UBER, META, MA, NOW, SPGI, TMO, and TDG are holdings in Titan's Flagship strategy.

Titan Global Capital Management USA LLC ("Titan") is an investment adviser registered with the Securities and Exchange Commission (“SEC”). Titan’s investment advisory services are available only to residents of the United States in jurisdictions where Titan is registered. Please refer to Titan's Program Brochure for important additional information. Titan’s affiliate, Titan Global Technologies LLC (“TGT”), is a registered broker-dealer and member of FINRA/SIPC. Contact Titan at support@titan.com.

Trade communications are meant for informational purposes only. All investments involve risk and the past performance of a security or financial product does not guarantee future results or returns. There is always the potential of losing money. Keep in mind that while diversification may help spread risk, it does not ensure a profit or protect against loss. The rate of return on investments can vary widely over time, especially for long term investments. Past performance is no guarantee of future results. 

There is no guarantee that any particular asset allocation or mix of funds will meet your investment objectives or provide you with a given level of income. There is always the potential of losing money when you invest in securities or other financial products. Investors should consider their investment objectives and risks carefully before investing. The price of a given security may increase or decrease based on market conditions and clients may lose money, including their original investment and principal. The information provided does not take into account the specific objectives, financial situation, or particular needs of any specific person. This is not an offer, solicitation of an offer, or advice to buy or sell securities, or any other product offered by Titan or any third party.

The content provided in this email is for informational purposes only and is not investment or financial advice, tax or legal advice, an offer, solicitation of an offer, or advice to buy or sell securities or investment products. Please visit www.titan.com/legal for important disclosures.