Newsletter - Fisconsult Fund Management
Dear Investors and Friends,
First and foremost, we wish you and your family a wonderful new year.
With 2020 gone, we are thankful for our professional experience in the investment world which allowed us to go through challenging stages, such as the 2000 internet bubble burst or the 2008 financial crisis. Even though, we never faced such volatile stock market movements within such a short period of time.
Given that pandemics occur rarely, we had no precedents that we could rely on, and 2020 made us go through a lot. Nevertheless, in this unique context, the fund's stock-picking strategy has once again proven fruitful and has enabled us to outperform the benchmarks FFM European Selection with a YTD performance of 11.18%, outperformed the Euro Stoxx 50 index by 16.32%, and FFM American Growth with a YTD performance of 24.04%, outperformed the Dow Jones by 16.79% and the S&P 500 by 7.78%.
To sum up, most European countries introduced new restrictions in December to deal with a persistent second phase despite favourable news relating to the arrival of vaccines. In the United States, the outgoing president is still adding insult to injury by not accepting the results of the November presidential elections. However, investors on both sides of the Atlantic felt that these uncertainties were not enough to derail the markets.
Interestingly, the market rotation in favour of the sectors we tend to leave behind did not persist in December as the slight rebound in the markets was eventually globalized and distributed over all sectors. Yet, forecasts for the coming year by various major banks indicate that this pattern of rotation should continue. While this may result in a slight decline in our outperformance in the short term, we do not envisage a change in our investment strategy for the coming year.
We, therefore, intend to continue our strategy in 2021 and remain convinced of our selection criteria based on resilience. We are not interested in a hypothetical rotation that would see us invest in companies whose investments do not even cover their cost of capital (what we call value destroyers). The companies in which we are invested continue to be attractively priced compared to their outlooks and, if there were to be a moment of poor performance, we would see these as positive opportunities, opening up new market entries for us.
A new quarterly newsletter format, written by Julien Devaux, Chief Investment Officer of our management teams in Geneva, will be introduced at the beginning of this year. In the first edition, he will have his views on the markets and tells us about certain pockets of exuberance such as Bitcoin, Tesla, and the IPOs of SPACs in the United States.
Fisconsult Fund Management
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