At the time of writing on 5 December, the investing mood in the UK is upbeat.  The Pfizer BioNTech vaccine has just been approved in the UK, the latest National Lockdown has just ended, meeting up with relatives at Christmas has been assured, the UK stock market has just had an excellent run in November, a Brexit deal with the EU could be agreed this month and the prospects for a healthy rise in UK share prices for the rest of December and beyond looks very promising.  What isn’t there to like?

Our sister company, Minerva Money Management’s fund, the CCM Intelligent Wealth Fund has had a topsy turvy time since its launch on 16 April 2018.  Its launch timing couldn’t have been worse.  In the last quarter of 2018 world stock markets fell 10%-15%.  Our fund fell by 14.8%* after 8 months pretty much in line with global markets.  Nonetheless, it was an undistinguished start.

2019 was a good year for the fund with a return of 14.6%*.  Still, a little disappointing when I have a target of 20% a year returns for the CCM Intelligent Wealth Fund.

2020 started well then the coronavirus pandemic started.  We had a stock market crash in March/April.  The fund actually beat its benchmark briefly after the crash when we adopted a cautious approach by investing up to 20% in gold and cash fearing a further crash.  However, we were totally astonished by the huge, record amount of international government funding to boost economies which caused a speedy stock market recovery and new market highs in the US.  At one stage the fund reached rock bottom when it ranked the bottom performing fund in its sector briefly.  A highly embarrassing moment.

The fund is a global equities fund so it has been given the tough benchmark of the MSCI World Index which is dominated by large US companies including the Giant Tech companies Apple, Google, Amazon, Microsoft, Facebook, Spotify and Netflix.  I have always considered this an unfair benchmark since our fund focuses on Small and Mid Cap companies with only about a third of the fund invested in US companies.  Furthermore, the US stock market has risen to a bubble level.  By any measure, it is the most overvalued it has ever been in history.  We have been increasingly reducing our holdings in US stocks as a result and focused on investing in great but under-valued companies in under-valued world markets such as the UK.

At last, the fund’s strategy is beginning to pay off.  Recent statistics for the fund are very encouraging. 

1st quartile & top decile (for the first time) over the last 3 months, 17th out of 211 funds and up +12.8%*

2nd quartile last 6 months, 77th out of 209  funds and up +14.11%*

Over the last 12 months to 3.12.2020 the fund is up +8.45%* and looks set to achieve its best annual performance to date.

I am supremely confident that barring another Black Swan event like Covid-19 or World war 3 the fund will have a record year of performance next year. The reason for my optimism is because the fund’s largest holding,  the unquoted company Juvenescence, has announced it will float on the US stock market in the next 6-12 months.  It is highly likely, though not guaranteed, of course, to launch at a price multiple a number of times what we paid for the shares.  The shares are valued in the fund at their original purchase price from earlier private fundraising.  So things are really looking up.

As for our Wealth Investment Strategy, WIS, I am proud to announce that its 25-year past performance record is an average return of 9.43%** net of annual management charges for a medium risk investor.  The compound returns are excellent.  Over the same 25-year period WIS’s cumulative compound return has been 732.8%** compared to the FTSE 100 Index’s return of 190.7%.**  I am extremely proud of these investment returns.  It’s testament to 25 years of endeavour. 

Over the last 30+ years, I have had the pleasure of serving many wonderful clients.  I have helped many of them retire early and enjoy a dream retirement with no money worries.  It never feels like work to me.  I love the relationships I have built with our clients over the years and continue to build with their children and in some cases their grandchildren.  I am truly blessed.  This isn’t a job.  It’s a vocation.  It is both my hobby and my work.  I have a passion for financial planning and helping de-mystify the complex world of financial services.  I feel as fortunate as people like the legendary investor Warren Buffett who, at age 90, says he still skips to work. That’s how passionate he is about his work.  I am equally passionate about financial planning and, like Warren Buffett, I have no plans to ever retire.  After all, why would you ever retire when you love what you do?  You know it makes sense***.

On that note, I wish all of my clients a wonderful Christmas and a very prosperous and happy New Year.  May you enjoy many more. 

***The value of investments and the income derived from them may fall as well as rise. You may not get back what you invest. This communication is for general information only and is not intended to be individual advice. You are recommended to seek competent professional advice before taking any action. All statements concerning the tax treatment of products and their benefits are based on our understanding of current tax law and HM Revenue and Customs’ practice. Levels and bases of tax relief are subject to change.

Past performance is not a guide to future performance.

*Funds Library
**FE Analytics

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