hiriskpaul wrote:With the FTSE 100 down today I took the opportunity to sell some February puts at 5600. All other world regions are showing a positive return for the year, but the FTSE is still down 10%. Brexit uncertainity has been a drag on recovery compared to other markets and I am betting on a trade deal being agreed, which should hopefully lift the market. It may not though if we see a significant rise in the pound as well, but implied volatility should drop so hopefully the puts should still do well even if the FTSE does not rise or drops a little.
It depends on what you regard as a worthwhile "world region" to include in a portfolio. As one of the larger global economies, the FTSE has done relatively badly because of Brexit and a lack of global tech companies, when compared with, say, the USA. VWRL, often used a a global benchmark is cap. weighted with more than 50% USA based companies, including Apple Facebook Microsoft Amazon etc. Some emerging markets have fared as badly or worse than the FTSE, including Latin America, Africa and Eastern Europe. Although like VWRL they are not ideal in their weightings, I use ETF proxies LTAM, XMAF and IEER for those regions.
% crashed column is the percentage drop from the average price in February 2020 to the mid March covid crisis low.
% upside represents the percentage price increase remaining, to get back to the mid March 2020 pre crash value
Thus, VWRL is now approximately 7% above its pre crash value, whereas the FTSE100 represented by ISF is still about 16% down. Eastern Europe IEER still has 24% to go to reach its pre crash level. This is probably explained by its heavy loading with Russian oilies and miners. Emerging market regional ETFs such as LTAM and IEER tend to be a lot more volatile than developed markets and represent a "reversion to the mean" opportunity in situations like the one we find ourselves in at the moment. I hold all of the above, except for VWRL, having bought in March/April, to give gains of 20% or more. The question now arises as to how to rebalance my global ETF portfolio. It also begs the question as to whether the boom in USA and China tech companies, which are in large part responsible for VWRL's comparitively good performance, is sustainable in the longer term.
regards
S