Market Commentary – 2021 Investment Outlook

2021 Investment Outlook

Our 2021 annual outlook summarises our views and insights on the key questions impacting our portfolios today.



2020 was a year that will be with us for the rest of our lives (as it surely will be for everyone reading this letter). We are truly grateful that we came through the experience as a stronger organisation and that we were fortunate to have several new families decide to work with us despite the turmoil and uncertainty.

When we reviewed our own performance, we realised that leaning on our “golden rules” of investing really came to our aid in the more difficult moments of 2020, allowing us to keep cool, be rational and play offence where possible. These rules were:

  1. You cannot time the market
  2. Markets always overshoot both to the up and downside and regularly “disconnect” from fundamentals
  3. When correlations go to one, there is really limited portfolio diversification available to investors

Everyone knows the above, but few investors are really prepared to deal with the environment when it happens. We also took away two other key points which are more a function of the environment post the last crisis of 2008, namely:

  1. Never underestimate the willingness of governments in the modern age to support their economies and ultimately their population (i.e. voters)
  2. Relying on traditional valuation metrics is not as meaningful as in the past when today’s “risk-free” rate is zero and is expected to remain very low for the foreseeable future

Our performance was strong in 2020 with portfolios experiencing gains in the high single to low double-digit territory. Active manager outperformance in Technology and Healthcare equities was a key driver, supported by modest positive returns in our uncorrelated strategies and credit allocations, as well as our gold position.

To continue reading the report in full, please download the full PDF document below:

Annual Letter 2021 Image

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