featherstone q2 2021 investment review

Q2 was a good period for our portfolios with our most aggressive strategy (Portfolio D) achieving a return of 8.05% over the quarter versus the benchmark of 5.36% and our least aggressive strategy (Portfolio A) also doing well with 6.47% versus the benchmark of 3.61%. Over twelve months our portfolios are up between 24% and 32%, in some cases more than doubling their benchmarks.

We are pleased to say that our Dynamic Investment Fund (in Portfolios A, B and C) was recently selected by FTAdviser, the Financial Times' publication for the wealth management industry, as one of their top five Mixed Asset Investment Funds. What Happened?

After an unfavourable Q1 which benefited the 'recovery stocks' such as airlines and oil companies, Q2 saw the return to fashion of the longer-term growth investment sectors and 'megatrends' where we prefer to invest, having a knock-on effect for the financial advice industry.

Chrysalis Investment Trust, our largest investment, was up 24.8% over the quarter following a very successful stock market listing of one of its key positions, Wise (formerly TransferWise). Having invested when the company was privately valued at £3.6bn last July, Chrysalis benefited when Wise became the largest tech firm to list on the London market, they are now valued at over £13bn. We continue to see good things ahead for Chrysalis, with other early-stage investments including Klarna, the world's most valuable private company, and Starling Bank, the number one digital challenger bank with Martin Gilbert (founder of Aberdeen Asset Management) as Chairman. We invested with Chrysalis at launch and have a very good relationship and information flow with the investment managers Nick Williamson and Richard Watts.

The RobecoSAM Smart Materials Investment Fund, the sustainability focused asset manager based in Switzerland and which invests in companies that provide innovative materials for the building sector, is now up over 20% for the year. They have benefited from increased demand for environmentally friendly and technologically advanced building products (40% of global emissions come from existing buildings). The fund invests in companies offering products and services that substitute existing materials and processes. The most interesting and fastest-growing areas are automation and robotics, 3D software, lightweight materials and energy storage materials.

Continuing with the green infrastructure overhaul theme, central to our wealth management strategy, the Wisdom Tree Industrial Metals Investment fund has continued its strong run as government infrastructure spending looks set to increase. US President Joe Biden announced a $1.9 trillion 'Build Back Better' recovery plan also known as the 'Green New Deal', in order to make the economy more sustainable, with ambitious investment in public transportation, sustainable housing, electric vehicles and upgrading the power grid to be carbon pollution-free by 2035. With scarcity of supply of the industrial metals needed, and other governments likely to do similar, we expect their demand to outstrip supply for some time.