After discussing the reasons that led to the conception of "The Haptón Portfolio", the landscape of the global economy and the socio-political trends that we believe will characterise the next decade, and the structural changes on the sectors we're invested in, it's time to look at how we're positioning ourselves. We will go through the individual companies and ETFs we're invested in to profit from the inefficiencies in the various sectors, while protecting our capital from the longer term trends of higher inflation and currency devaluation.
Disclaimer
We are not professional financial advisors, therefore not qualified to give financial, investment or any other kind of advice. The content in our "The Haptón Portfolio" publication is intended to be used and must be used for informational purposes only. It is important you do your own research and seek independent professional advice before making any investment decisions.
We are mere hobbyists, passionate about learning more about the financial markets and gaining a better understanding of the global social, political and economic trends that shape our world and how these impact our investment decisions. As amateur retail investors, we’re only risking our own money and only amounts that we’re comfortable losing. This publication is an educational investment experiment and should only be taken as such
The Haptón Portfolio
We opened up these positions on the 31st of August 2021. We’ll be adding to these in 2-3 tranches over the next quarters.
Uranium
We're investing in Cameco (CCJ), NexGen energy (NXE) and Denison Mines (DNN). Cameco is one of the largest uranium miners in the world, NexGen has a large deposit and is a key component in the two uranium related ETFs (URA, URNM), and Denison Mines is an exploration company with a healthy balance sheet and good management.
From the companies available to us in Freetrade.io these are the ones we think are best to hold, but this might change in the future. If you have access to Yellowcake PLC (YCA), Sprott Physical Uranium Trust (U, previously Uranium Participation Corp) or Kazatomprom (KAP) it might be incorporating them into your portfolio to reduce risk.
Precious Metals
We're investing 5%in physical gold and another 4-5% on gold miners to get leverage. We might be adding some positions to Gold and Silver royalty companies in the future.
Base and Energy Metals
Rio Tinto (RIO), Glencore (GLEN) and Vedanta (VEDL) are all diversified miners / natural resource companies that can give us some exposure to base and energy metals. We're looking for more companies available to us to gain more exposure to battery and energy metals, as we don't feel these picks fully capture the thesis. For example, Rio Tinto's most income comes from Iron Ore, even though it's diversified into copper and other energy metals, so it's prone to fluctuation of the Iron Ore markets. However, we like Rio Tinto's dividend of almost 14%.
Copper
Freeport-MacMoRan (FCX) is the go to company for whoever wants to invest in copper, as it tracks the price of copper pretty well. Southern Copper (SCCO) has a lot of operations in South America, which comes with its own risk and Turquoise Hill Resources, a subsidiary of Rio Tinto, operates the Oyu Tolgoi mine in Mongolia.
Oil & Gas
EQT Corporation (EQT) is a natural gas production company in the US, set to benefit from increased natural gas demand. Pioneer Natural Resources (PDX) is an independent oil and gas exploration and production company in the US. Sinopec Shanghai Petrochemical (SHI) is one of China's biggest producers of petrochemical products and PetroChina (PTR) one of the largest oil and gas producers and distributors in China. Both pay big dividends 6.24% and 8.20% respectively.
Coal
Peabody Energy (BTU) is a coal pure play, recently came out of bankruptcy and should benefit from coal demand. Arch Resources (ARCH) mines thermal and metallurgical coal in the US. We feel both these companies are a bit risky, as they are operating in the US, but we don't have any better options. We're also interested in Alliance Resource Partners (ARLP) as it pays a nice dividend of 4.1%, but we haven't invested yet.
Agriculture
Nutrien (NTR), The Mosaic Company (MOS) and CF Industries Holdings (CF) are our fertilizer picks and our way to gain exposure to increased agricultural product demand.
Shipping
DHT Holdings (DHT) operates crude oil tankers, Star Bulk Carriers (SBLK) engages in dry bulk cargoes and Flex LNG (FLNG) operates LNG transportation vessels. They all pay good dividends 17.79%, 12.31% and 9.42% respectively. We're also looking to add some containership exposure to our portfolio in the coming months.
Eastern Europe
iShares MSCI Eastern Europe Capped ETF (IEER) gives us some exposure to East Europe and Russia. A little over 50% of the the ETF is composed of companies operating in the energy and material sectors such as Lukoil, Gazprom and Norilsk Nickel to name a few. It's not ideal but it gives us good exposure to Russian commodity producers, hopefully less affected by ESG pressures.
Asia
We're using iShares Asia Pacific Dividend (IAPD) to gain some exposure to Asian markets. 40% of the ETF is invested in Japan, around 30% in Hong Kong (where a lot of Chinese equities are listed) and 17% to Australia. Only 10% of the ETF is invested in energy and materials, which is our primary focus, however the ETF pays a good 4% dividend (after fees). We're actively looking for better investments to express our views with Asian companies.