Portfolio & Risk Report

March 2019 Issue | Released monthly

Authors & Editors: VP of Investments, Aman Regmi

VP of Finance, Denis Karmalita

Finance Associate, Aron Goldenberg

Finance Associate, Rohan Shah

Finance Associate, Tony Tran

April 14th, 2019


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Important Information
This report is a monthly update on the performance of York Trading Club’s Long Equity Fund (‘York
Trading Club Principal Fund (Class A)’). York trading Club is a ratified student club at York University.
Our goal is to provide practical knowledge and awareness in the field of finance and investments.

Investing in the types of equities referred to in this report involves several risks, including loss of
capital, illiquidity, lack of dividends and dilution, and it should be done only as part of a diversified
portfolio. For more information about the risks of investing, please read our disclaimer.

The performance statistics stated in this report refer to the past, and past performance is not a
reliable indicator of future results. All of our returns reflect paper returns, which means that while
they show the notional performance of investments based on market activity. The do not necessarily
reflect the cash returns that could be achieved if the relevant financial instruments were traded.

All tax treatment referred to in this report depends on individual circumstances and may be subject
to change in the future.

York Trading Club does not provide legal, financial or tax advice of any kind and nothing in this report
constitutes such advice. If you have any questions with respect to legal, financial or tax matters, you
should consult a professional adviser.

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Investment Overview & Performance

York Trading Club Principal Fund Overview (Class A)

Performance
Return Since
Monthly Return 0.52% 6.48%
Inception

YTD Return 11.13% Annualized Return 6.42%

Excess Return % of Positive

(Rf rate = 1.66%) -1.14% Months (Last 5) 80.00%

Risk

Maximum 9.26% 1.22

Beta (3Y Monthly)
Drawdown

6.73% Reward-to-Volatility -0.01

Annualized SD Ratio (Treynor)

Sector Exposure (Mar 2019)

Cash 21.81%
ETFs 18.73%
Retail - Food 12.33%
Consumer - Discretionary 10.96%
Financials 10.52%
Energy 8.78%
Paper and Related Products 4.72%
Retail - Consumer 4.63%
Consumer - Cyclical 4.32%
Communications 3.18%

0% 7.5% 15% 22.5% 30%

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 Retail - Consumer
4.6% Consumer - Cyclical
4.3%
Paper and Related Products
4.7% Communications
3%
Energy
8.8%
Cash
21.8%

Financials
10.5% Sector Exposure -
Mar 2019

Consumer - Discretionary
11.0% ETFs
18.7%
Retail - Food
12.3%

Exxon Mobil Synchrony Financial

$4,071.00 $5,666.50

Under Armour Dave & Buster's

$2,100.00 $2,496.50

California Resources Corp. Baidu

$5,282.00 $3,391.20

ETSY Inc. Toronto-Dominion Bank

$3,364.00 $5,535.00

S&P 500 ETF

$19,945.80 Portfolio Breakdown
- Mar 2019 Cash
$28,397.73

Floor & Decor Holdings

$8,308.00
Loblaw Companies Ltd.
International Papers
$13,132.00
$5,023.65

Best Buy Inc.

$4,934.88

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 York Trading Club Principal Fund (Class A) Holdings - As of February 28, 2019
Market Price Price
Symbol Company Name Exchange Sector P/L % P/L $
Value (March 1) (March 31)

Loblaw Companies
L Ltd. TSX Retail-Food $13,132.00 $64.89 $65.66 1.19% $ 154.00

BBY Best Buy Inc. NYSE Retail-Consumer $4,934.88 $67.81 $71.52 5.47% $ 255.99

International Paper and

IP NYSE $5,023.65 $45.87 $46.95 2.35% $ 115.56
Papers Related Products

Floor & Decor Consumer-

FND Holdings NYSE Discretionary $8,308.00 $38.65 $41.54 7.48% $ 578.00

SPY S&P 500 ETF NYSE ETFs $19,945.80 $280.41 $284.94 1.62% $ 317.10

Consumer-
ETSY ETSY Inc. NASDAQ Discretionary $3,364.00 $72.77 $67.28 -7.54% $ (274.50)

California
CRC Resources Corp. NYSE Energy $5,282.00 $23.74 $26.41 11.25% $ 534.00

Consumer,
UAA Under Armour NYSE $2,100.00 $22.86 $21.00 -8.14% $ (186.00)
Cyclical

Consumer,
PLAY Dave & Buster's NASDAQ Cyclical $2,496.50 $51.79 $49.93 -3.59% $ (93.00)

BIDU Baidu NASDAQ Communications $3,391.20 $162.09 $169.56 4.61% $ 149.40

XOM Exxon Mobil NYSE Energy $4,071.50 $81.02 $81.43 0.51% $ 20.50

Synchrony
SYF NYSE Financials $5,666.50 $33.40 $32.38 -3.05% $ (178.50)
Financial

Toronto-Dominion
TD NYSE Financials $5,535.00 $54.80 $55.35 1.00% $ 55.00
Bank

Cash $28,397.73

Portfolio Value

$106,475.76
$104,682.51
$100,000.00 $100,406.41

$86,968.00
$83,174.89

Oct 2018 Nov 2018 Dec 2018 Jan 2019 Feb 2019 Mar 2019

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This past month of March captured one of the S&P 500’s best quarters of all time. The markets rose
by roughly 80 basis points throughout March. There were several corrections and rallies throughout
the month. YTC’s trading strategy is focused on a short term trading horizon, thus we trade based on
event driven plays and earnings. Over the past month our fund has accumulated a total gain of
0.52%. This provides an annualized return of 6.42%. Our fund’s performance was slightly modest
than the market over this period, given that the S&P 500 grew by 0.80%. This is simply due to our
earnings-based trading philosophy which did not see much action in March after an overwhelmingly
positive February. Since our returns this month have not been as significant as last month, we did not
experience any large rallies in any of our positions. Despite that being the case, California Resources
Corporation (NYSE:CRC) and Floor & Décor Holdings (NYSE:FND) have seen large gains over the
month. California Resources Corporation saw increased trading volume and price momentum as oil
prices have slowly risen over March. After a steep correction in Best Buy Inc. (NYSE:BBY), our
position is finally starting to see positive returns. Additionally our large position in Loblaw Companies
Ltd. (TSX:L) has continued to appreciate month over month.

Closed Positions
March saw a lot of volatility with improved US-China trade talks pushing up the major financial
markets with small waves of declines. We exited our position in Bio Telemetry (NASDAQ:BEAT) during
early March as we noticed heightened selling in the mid-70s price range with more than normal
volume. Secondly, we exited our position in Dominos (NYSE:DPZ) due to questionable plans by the
firm to try to expand and grow. Lastly, we liquidated (TSX: GOOS), famously Canada Goose as we
believe that earnings during this off season might not be able to surprise.

Company Exchang Mkt Entry Exit
Symbol Sector P/L % P/L $
Name e Value Price Price

Bio Telemetry Consumer,

BEAT Inc. NASDAQ non-Cyclical $3,663.50 $72.02 $73.27 1.74% $62.50

Consumer,
DPZ Dominos NYSE Cyclical $2,552.30 $280.10 $255.23 (8.88%) ($248.70)

Consumer,
GOOS CanadaGoose TSX Cyclical $3,352.50 $76.02 $67.05 (11.8%) ($448.50)

New Positions
While February was an active month for our portfolio, we managed to open several positions through
March as well. Some positions include XOM (NYSE:XOM), Synchrony Financial (NYSE:SYF) and
Toronto-Dominion Bank (NYSE:TD). We experienced a very strong series of stock pitches submitted by
our associate team through this month with almost every pitch reflecting a good trade. A majority of
these trades are geared to profit from upcoming earnings at the time they were submitted.

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Symbol Company Name Exchange
XOM Exxon Mobil NYSE
Synchrony
SYF Financial NYSE
Toronto-Dominion
TD Bank NYSE
Macro & Market Outlook

US Tariffs Update. Trade Talks Halted. The
recent trade tensions between the world’s two
largest economic powers (US & China) have yet
to finalize on a new trade deal. Their recent
efforts towards negotiating on a new deal have
halted due to conflicting interests. However,
"The United States and China had productive
meetings and made progress on numerous key
issues" during trade talks from April 3 to April 5,
according to a statement from the White House.
"Significant work remains, and the principals,
deputy ministers, and delegation members will
be in continuous contact to resolve outstanding
issues." Chinese state media said on Saturday
that the two sides had made "new progress" in
the talks and future discussions will be
conducted in "various ways." (Minkoff, 2019)
US Job Data Relieve Signs of Slowdown. Data
released on April 5th showed the economy
added 196,000 jobs in March, rebounding from
the small sputter of jobs added in February.
Most of the new jobs were added in healthcare
and in professional and technical services (e.g.
accountants and engineers) – as well as in
construction, perhaps thanks to homebuilders’
rising sales expectations. The biggest job
losses were in manufacturing, despite higher
activity last month – and in retail, which maybe
pared back jobs in anticipation of fewer
shoppers this year. Average wages were 3.2%
York Trading Club
Portfolio
Market Entry
Sector Allocati
Value Price
on
Energy $4,071.50 $81.02 4.05%
Financials $5,666.50 $33.40 5.85%
Financials $5,535.00 $54.80 5.48%
higher than a year ago – below forecasts and
lower than in recent months. The slowdown
could be partly explained by more technical
workers being hired in March while retail jobs
fell: minimum wage hikes from Amazon,
Walmart, and now Target would’ve helped boost
wage growth previously.
Brexit Pains Increase. European Leaders gave
British Prime Minister Theresa May another two
weeks to work out what she wants to do with
Brexit. Under the deal agreed, if she cannot get
lawmakers in London to endorse her withdrawal
agreement she will have until April 12 to decide
whether to leave without an agreement or ask
for a much longer extension. In the – probably
unlikely – event that the already twice defeated
agreement is passed, then the U.K. will leave
the European Union on May 22. Market reaction
to the deal was limited, as it does little to
remove the uncertainty surrounding Brexit, and
so far, only offers a short extension to the
deadline.
Global Growth Outlook Improves. Fears over
global growth this month are easing after
services and composite PMI data came in
generally stronger than expected. In China, the
services gauge rose to 54.4 in March, while
Markit’s Composite PMI for the euro area came
in at 51.6, higher than the earlier estimate. The
one blot on the copybook was U.K. services
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unexpectedly slipping below 50, pointing to a
contraction in that critical part of the British
WTI Continues to Rally on Political Tensions.
Even after starting the year with its best quarter
since 2009, crude continues to push higher. A
barrel of West Texas Intermediate for May
delivery added to yesterday’s gains to trade at
$62.01 by 5:45 a.m. Eastern Time. OPEC
continues to keep the squeeze on production,
with a survey showing March production falling
to 295,000 barrels a day, as the cartel ignores
President Donald Trump’s pleas for more supply
to cap prices. Iranian Oil Minister Bijan Namdar
Zanganeh said yesterday that OPEC and its
allies could extend production cuts beyond the
current June deadline without difficulty.
York Trading Club
economy amid continued Brexit uncertainty.

What we’ve been interested in (extra): New
Information Issued Following Investigation on
March 737 Max Crash. "With the release of the
preliminary report of the Ethiopian Airlines flight
302 accident investigation it’s apparent that in
both 737 Max flights, the Maneuvering
Characteristics Augmentation System, known
as MCAS, activated in response to erroneous
angle of attack information," Boeing (NYSE:BA)
CEO Dennis Muilenburg said in a statement.
However, an update will "add additional layers
of protection and will prevent erroneous data
from causing MCAS activation. Flight crews will
always have the ability to override MCAS and
manually control the airplane." 

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Recommendations
As we could potentially be nearing the end of the cycle, investment associates are advised to
continue to seek counter cyclical or defensive opportunities to tackle issues regarding the slowing
down of economic growth.

Although the market is frothy, we recommend that investment associates continue to invest in good
opportunities regardless of sector. In light of recent optimistic reports on the growth of the US
economy and other parts of the world, we believe that the global economy still has some slack and
that a global recession is not imminent. With current market conditions where they are after a
correction, equity prices are attractive and more names will be added to our portfolio. These
assumptions are based on the current economic state that we are in and likely will adjust our view in
the future based on new information and developments.

With a larger portion of funds allocated to new positions in energy, we continue to monitor keep a
pulse on geopolitical tensions and news updates from OPEC. Our investment team is encouraged to
continue diversifying our portfolio with low valuation equities, with an emphasis on adding exposure
in the healthcare and diversified industrials sectors. In light of earnings season, we also recommend
setting precautionary measures to offset potential losses due to price swings upon release of
earnings information.

Disclaimer: all information present in this report is for educational and informational purpose only and without warranty of any kind. All
information present in this report represents only the opinion of the writers, which may be influenced by various factors. You are advised to
conduct your independent research and invest responsibly. Investing in markets may not be suitable for all investors, and investing in the
stock market has risks, with the possibility in which you could lose all your investment. Before making your investment decision, please
consult with your financial advisor. York Trading Club is not responsible for your losses, financial or otherwise, as a result of making
investment decisions.

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