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Beauty And The Beast

Posted by: Brian Dennehy

 

How about a smooth and beautiful process versus a long-term punt, and stomach-churning volatility?

When we updated the latest performance numbers for the Dynamic UK Growth Portfolio we thought it might be interesting to compare these with other sectors, markets and themes over the same period, from July 1994.  These are set out in table 1 at the end of this blog.

It is fascinating that if you had the foresight to invest in technology funds in 1994 (here represented by the Henderson fund) you would, eventually, have pulled your socks up since the tech crash from 1999 and done rather well.  Yes, this was largely driven by the performance of only a handful of stocks, but let’s not be churlish.

Most people only caught on to such funds in 1998/9, and in huge scale, hence the bubble.  But with the benefit of hindsight it has undoubtedly been a profitable journey for the very early buyers.

In contrast, the Dynamic UK Growth Portfolio does not require hindsight, only the application of a beautifully simple process, for which you received a 25% performance bonus compared to the tech fund.  

It gets better.  The volatility of the technology fund is more than 3x greater than the Dynamic Portfolio with stop-losses applied.  To bring this to life, glance at the chart just below – beauty versus beast.

Chart 1: Dynamic Fund Ratings portfolio (with stop losses applied) vs. Henderson Global Technology

You will get the chance to discuss this and much more in life teleconferences in coming months.  Watch this space.    

ACTION FOR INVESTORS

  • Make sure you have a plan set up
  • You should have stop-losses as one weapon in your armoury… 
  • …so when the time comes you are prepared!

FURTHER READING

 

Table 1: Performance from 1/7/1994-7/9/2017

 

Performance %

Dynamic Portfolio

1519.48

Henderson Global Technology

1207.54

UK Smaller Companies sector average

975.74

S&P 500

812.72

UK Equity Income sector average

524.22

UK All Companies sector average

476.93

FTSE 100

467.15

BlackRock Gold & General

461.33

Global EM sector average

301.84

Topic: Generating growth


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