March 2021 update

As we know, Covid acted as a catalyst for the technology sector, leading to the strong performance enjoyed by our wealth management clients last year. As we have mentioned before, it was clear to us in Q3 last year that many of the largest tech companies we are invested in were trading at crazy multiples and therefore we reduced some of our tech investment exposure by selling part of some of the more frothy positions such as Baillie Gifford Discovery investment fund, Polar Capital Healthcare investment fund and iShares Digitalisation

What we have seen in the last few weeks is the inevitable blow off from an overbought situation for wealth managers, with a rotation out of some of the Covid-positive tech stocks into disadvantaged companies which should benefit from the re-opening. Despite this optimism, many of the companies rallying recently remain poor businesses in challenged and forever-changed sectors which may still ultimately fail. In our eyes many of the sectors remain un-investable and will not be appearing in our wealth management portfolios.

Whilst we have avoided investment exposure to the large tech companies who have led this recent sell-off (the 'FAANGs' have fallen circa 20%), the smaller companies we favour our investments with have unfortunately also been somewhat affected. Subsequently, since our last update on the 25th Feb our wealth managed portfolios have given back some of their gains (Portfolio A -1.62%, Portfolio B -2.33%, Portfolio C -3.03%, Portfolio D -3.60%).

We remain confident in the long term themes, and the technology investment funds we retain within the wealth managed portfolios offer exposure to companies whose future earnings, in our opinion, continue to be dramatically underestimated. Markets are likely to remain volatile while the World is trying to find its feet but, over the long term, the themes we are exposed to offer exciting investment opportunity.