Market & Portfolio Update - July 2020
Global share markets continued to rise following the volatility we saw during March, up a further 3% in July. This continued the theme of previous months as share markets are looking through rising cases of Covid-19 in the United States to news of potential vaccine developments, higher profits from some tech companies relatively immune to the virus, and support from governments and central banks. Fixed Interest investments also made a good contribution to fund returns, with bonds rising in value amidst the continued stimulus from central banks.
In addition to the general rise in markets, the portion of global share investments that are managed in conjunction with Rothschild continued their strong performance. Standout returns came from Alibaba (Chinese e-commerce giant), Linde (multi-national industrial gas company), and Danaher (US-based conglomerate) which each gained more than 10%.
The rise in markets since March combined with the gains from our active management mean that returns over the last 12 months are now solidly positive for all of Booster’s core diversified funds. This positive gain despite the disruptions to world economies over this period is testament to the importance of sticking to an appropriate long-term financial plan during both rough and calm seas.
You’re sitting in your favourite restaurant, feeling famished. The waiter arrives and reads out a long list of mouth-watering specials. Yet the moment he walks away, you find you can recall only the last item on the list. Congratulations, you’ve been struck by the recency effect.
One of the most persistent debates in the investment industry is whether investors are better to use passive or active managed funds. With strong advocates on both sides of this debate, it may seem like an obscure discussion. However, for investors, long-term performance data tells a conspicuous story.