Summary
- After the success of a hedged portfolio built around an AT&T position in 2017, I started presenting similar portfolios built around other conservative stocks, including Merck in 2018.
- Here, I update the performance of the Merck portfolio halfway through its planned six-month duration.
- This portfolio is lagging the market so far due to two forms of drag from the hedging.
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Image via Merck's Twitter page.
A Hedged Portfolio Around A Merck Position
Last August, I wrote about the performance of a bulletproof, or hedged, portfolio built around a position in AT&T (T) in 2017 and presented a new one, which completed last month (each portfolio lasts for six months). Following that, I began presenting hedged portfolios built around other, putative conservative stocks, including Merck (MRK) in December. Let's see how it's doing three months in, given the performance of MRK and the market in general since then. First, a reminder of how the portfolio was constructed and what it consisted of.
