May 1, 2021

In the Frame – Issue 4, A message from Hue
Managing Director

A message from Hue: What I saw in April 21

April saw global equity markets rebound strongly. Fixed income markets consolidated, which alleviated some investor anxiety surrounding interest rates. This consolidation allowed investors to focus on how well the global economy is recovering from the pandemic. The Australian share market also continued its accent. Supported by the weightings of financials and materials, it rose +3.46%. The biggest investment theme for the month continued to be the reflation trade and the subsequent commodity super cycle. Copper and iron ore hit fresh 52-week highs during the month while Oil closed in on $70usd.

Rebound & Consolidation

The long short Australian equity strategy finished the month up +2.34%, which was a very good result considering the mixed performance from many of the constituents of the ASX 200. The strategies top sector weighting continues to be materials at 42.88%. The strategies second largest weighting being Industrials at 10.34%.

The Global Macro strategy had a positive month, it rose +5.86%. Most of the businesses that consolidated and rebased during March made solid contributions in April. Investments in Cryptocurrency businesses, Battery Material producers & explorers and situational trading opportunities added +1.29%, +1.94% and +1.63% respectively.

The 3 & 6-month performance figures for the Frame Long Short Australian Equity Fund continue to be a solid +11.18% and +14.95% respectively. With the commodity super cycle under way, I expect this strategy to continue to perform well. The Frame Futures Fund rebounded solidly and is continuing to have very good medium-term performance, 6 & 12-month performance is +13.80% & +33.49% respectively.

Rampant cryptocurrency speculation

Dogecoin. A crypto currency created as a joke, saw their market cap rise to ~$38bn by the end of April. Their price jumped from $0.053 to $0.738 by the 8th of May, however has subsequently dropped to $0.481. This speculation is not healthy for global financial markets, because when the bubble bursts, the emotional and financial loss is felt across the whole financial system.

ARK Innovation ETF

Most investors have heard of the remarkable story of ARK and their exchange traded fund ARKK. They generated >100% in 2020 and subsequently grew their funds under management from US$10bn to over US$70bn. Recently, as the tech sector rotation has occurred, they have struggled. Their share price rose to highs of $160 however since January, has declined by -34.68%. Importantly ~$8.5bn flowed into this fund at a median price of $139.

The reason why this is significant is because as their share price continues to drop, investor redemptions will continue to rise. To fund these redemptions, ARK must sell the individual holdings, which in turn drives the share prices of these companies lower. This cycle is self-perpetuating.


May is where we enter the quieter time of the year for the US markets as they enter their summer holidays. The adage “Sell in May and go away” has generated -0.708% for the S&P500 over the last 10yrs. Domestically, we will have most companies either providing trading updates or issuing guidance to the market for the upcoming reporting season. I look forward to the reporting season as we have historically performed very during these periods.

If you would like to discuss any of these points, please email me at or call our office on 02 8668 4877.

Hue Frame
Managing Director

Past performance is not an indicator for future performance. This is not intended to be financial advice and does not take into account any particular person’s circumstances. Before relying on this information, please speak to an independent financial adviser.


Download the full report by clicking the image below.