Featherstone q4 2020 investment review

In a year when the word ‘unprecedented’ has been used an unprecedented number of times, the first half of November was full of unprecedented news. The most unprecedented of which, was news of vaccines developed by Pfizer/BioNTech, Moderna and AstraZeneca/Oxford University. 

The speed of development took financial investors and wealth managers by surprise. The vaccine announcements proved to be a shot in the arm for so-called ‘value’ investors. The ‘Dash to Trash’ kickstarted a resurgence in the share prices of companies exposed to broad economic recovery and a return to normality. 

Airlines, banks and high street retail businesses may continue to bounce, but we are not here to speculate in troubled sectors, the traditional ‘value versus growth’ argument will occupy column inches, but it is not a discussion topic for us. As wealth managers, rather than gamble on short term volatility, we will continue to focus on sectors, themes and assets which are attractively priced and represent quality long term investment.

We had anticipated a vaccine at some point in the first half of 2021. As such, we had already begun to trim the year’s winners from the digital economy in favour of our sustainable energy theme (the Schroder investment fund we invested in enjoyed a 24% bounce in November). We have also added Aubrey European Conviction investment fund which invests in high quality European (including UK) stocks and increased our exposure to industrial metals through the Wisdom Tree Industrial Metals Fund, which we expect to benefit from a broad economic recovery and increased government infrastructure spending. We also reduced our investment in Gold to reflect our more positive outlook for equities.

In expectation of a trade deal with the EU, we’ve increased our investment exposure to UK small caps by adding to existing positions in the Polar Capital UK investment fund, the Merian Special Situations investment fund and the very exciting Merian Chrysalis investment trust which owns a number of private companies planning to float. Such companies include Starling Bank which is the UK’s leading digital challenger bank (rumoured to be an acquisition target by JP Morgan) and Klarna the ‘buy now pay later’ market leader which is growing at the astonishing rate of 21m new customers in the year to September.

Everyone at Featherstone would like to take this opportunity to thank all of our wealth management and financial advice clients for your continued support through an ‘unprecedented’ year, and wish you a very Happy Christmas and a brilliant 2021!

 

2020 Performance (YTD)

 

Portfolios have performed extremely well in 2020 versus their respective benchmarks (Total returns for the period 01/01/2020 to 16/12/2020)

 

Portfolio A   + 6.6%  (Investment Association 20% - 60% Equity 2.7%)

Portfolio B  + 10.7% (ARC Balanced Benchmark 2.7%)

Portfolio C  + 15.2% (ARC Steady Growth Benchmark 2.3%)

Portfolio D  + 19.1% (ARC Equity Benchmark 2.4%)