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FFM Newsletter - Sep 2020

Updated: Oct 30, 2020

Fisconsult Fund Management

September 2020

After a euphoric summer, Markets entered into a logical consolidation phase at the beginning of autumn with the main indices declining in September: -4.55% for the S&P 500, -2.56% for the Eurostoxx 50 and -2.73% for the CAC 40.

This correction, which is most welcomed following the almost uninterrupted recovery of the markets from the abyss they had fallen into in March, will undoubtedly dampened the enthusiasm of a number of speculators who have been flocking to the markets since the pandemic and who were probably beginning to believe that the only way for the markets was up.

Between the 2nd and 24th of September, the Eurostoxx 50 dropped by -6% while the S&P 500 collapsed by 9.33% before both rebounded at the end of the month.

United States

It is interesting to note that it’s the US volatility remains at high on the outsets. However, the magnitude of market fluctuations, although still substantial, is diminishing compared to the extremes we experienced during spring.

This can be explained in particular by strong investor demand for protection in the form of option purchases to hedge against a possible sharp decline in the markets between now and the end of the year. This frenzy is essentially linked to the uncertainties surrounding the US presidential and parliamentary elections that are coming up in early November with a possible long vote count in some states (as was the case in Florida in 2000).

We will keep a more attentive eye to the run for the majority of the upper house of the American parliament, particularly the Senate than to the race for President. Indeed, the worst-case scenario would probably be a combination of a Democratic President and a Republican Senate, giving the Republicans a veto power over US fiscal policy, which is a key element in an economy weakened by the pandemic.


On the European side, the markets are greatly influenced by developments on the other side of the Atlantic and seem for the moment to be unmoved by the now confirmed arrival, of a second wave of contamination.

The health situation has in fact worsened considerably and is pushing governments to tighten social distancing measures with new restrictions and to close for bars and restaurants, which should further worsen the situation in this much affected sector.

Paradoxically, analysts are rather optimistic about the publication of results for the third quarter, thanks to a significant upturn in activity in many sectors and despite a somewhat gloomy outlook for the last quarter of the year.

Fund Performance

In spite of a slight slow down, our funds, continue to largely outperform the benchmark indices by a wide margin. FFM European Selection Fund posted a positive performance of 2.48% in September to reach a YTD performance of +8.82% for the year against indices that remain largely in deficit with a -2.73% decline over the month and a YTD performance of -15.88% for the Euro Stoxx 50.

In the United States, FFM American Growth Fund also continued to outperform the indices, with better resistance in September: -2.69% against -4.55% for the S&P 500, and a YTD performance of +13.55% against an S&P 500 at +3.77% and a Dow Jones still in at - 3.6%.

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