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Recapping a Mild February Bounceback for the Altan Insights 100

Recapping a Mild February Bounceback for the Altan Insights 100
March 2, 2022
Dylan Dittrich

Altan Insights 100 (1/31/22): 985.63

Altan Insights 100 (2/28/22): 1,017.08

February Performance: +3.2%

QTD and YTD Performance: -2.2%

The Altan Insights 100 broke a three month losing streak in February. While fractional markets held up better than most risk assets during a down January, February saw some small steps taken towards recovery, with three consecutive up weeks during the month. Perhaps unsurprisingly, the fractional space was not roiled by myriad factors weighing on traditional risk assets, though the recovery in fractional did trail the larger bounce in crypto. With performance having been challenged since the end of September, much of the damage was perhaps already done, with limited room for further selling pressures in many categories.

January 31st was the lowest point of the year to date for the index at 985.63. That drawdown from peak to trough lasted 127 days, with the index down 15%. That was both shorter and less severe than the Q1/Q2 2021 drawdown of 20.7%, which lasted 146 days. At no point in the prior drawdown did the index break above the 50 day moving average; this month, the index broke above on the 12th and spent much of the rest of February ahead, though it remains in close touch and has stumbled below on a few occasions.

With most assets having joined daily trading on Rally, this month saw more constituents move in either direction than any prior month. Just 13 assets were flat in February. The mix of assets tracked skewed more positive this month - 50 index constituents gained value. On average, positive performers were up 11.3%. The average negative performance was equal in magnitude at -11.3%, but just 37 constituents lost value.

Positive performance was driven almost entirely by the sports market this month. The top eighteen performers were in the Sports Card and Sports Memorabilia categories. As has been well documented, February was a hugely significant month in the sports auction world, and newsworthy comps and headline sales often have the ability to generate momentum in fractional, as well as ground fractional markets in reality to the extent they've traded well off of comps. Buyouts can have that effect as well, as was the case in comic books and video games this summer. Of twelve buyout offers tabled during the month, eleven were for assets in the sports card or sports memorabilia categories.

Leading the way in percentage return this month was Tim Duncan's Precious Metal Gems card on Collectable, reinvigorated by the $2mm record sale of Kobe Bryant's Green PMG late in the month. The second and third best performers were both among our bottom five performers in January, when Wilt's uniform lost over 40% and DiMaggio's jersey lost 58%. This continues a common fractional trend of weak performance, not driven by comps or news, reversing in the weeks and months to follow. The bought-out Alifabolaget Pele rookie was the fourth best performer, which of course provided tailwinds for the fifth best performer, the Quigol Pele rookie.

After holding up surprisingly and perhaps irrationally well in January, two CryptoPunks were the fourth and fifth worst performers in February. After gaining over $104k in January, the Mahomes Laundry Tag card gave back over 29% this month. Jordan's "Shattered Backboard" Jersey on Rally was the second worst performer, losing 34%. Finally, the challenging fractional environment for Pokémon continues, as the second first edition complete set to IPO on Rally took its turn enduring brutal losses, down 42.5%.

In dollar terms, we actually see a different array of top and bottom performers. The Tom Brady Championship Ticket card on Collectable added nearly $400k, gaining 23%. Wilt's Rookie Uniform added $263k, with an 11.5% gain. The '52 Topps Mantle card on Collectable also added $206k, gaining 18%. Despite trading for just one day as cars made their return to the Rally trading floor, the Porsche 356 Speedster lost $90k and over 20%. Stephen Curry's RPA on Rally lost $94.5k after brighter prior months. The largest loser was the Mahomes Laundry Tag, which continues to whipsaw.

There are eight new constituents in the index to start March, which is relatively mild turnover. Three assets performed their way in: the Bulls Hardwood Floor, which was dropped last month, the LeBron, Carmelo, Bosh Logoman, and the 1969 Topps Basketball Set. Of the seven assets leaving the index (one was bought out), just two performed their way out: the Jordan "Shattered Backboard Jersey" and the Jordan game-worn rookie sneakers, both on Rally, as sports memorabilia continues to face challenges on the platform.

Shifts in the allocation by asset class are relatively muted this month. Sports Cards, Sports Memorabilia, and Memorabilia all saw modest upticks, while Comic Books, Trading Cards, and Cars declined. No single category increased or decreased in allocation by more than 2%.

There were a number of shifts in the top ten constituents heading into March. The Declaration of Independence and Wilt Rookie Uniform retain the top two spots. The Brady Championship Ticket leapfrogged Honus, and the '52 Topps Mantle leapfrogged the LeBron Exquisite RPA. The Topps Gretzky Rookie jumped from 9th to 7th. The Wilt High School Uniform rejoined the top ten, while the '52 Topps Jackie Robinson is a newcomer at #9. Finally, the LeBron Carmelo Dual Logoman rejoined at #10 as well. The Mahomes Laundry Tag RPA and Tiger Putter dropped out of the top ten, while the Pele Rookie was bought out.

We'll be diving deeper into both asset class and marketplace specific index performance in a Pro report later this week. We'll also investigate how equal-weighted indices performed, examining a broader swath of the fractional markets. If you want to understand where the opportunities and momentum in the market are, don't miss it - upgrade to Pro with a free seven day trial today!

Want to get more great insights and access to powerful tools to help guide your investment strategy? Signup for Altan Insights now.

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