The first half of 2021 has felt somewhat calmer than 2020 despite a UK lockdown from January to April, and the recent emergence of the highly contagious Delta variant. As stated in our January letter, we had a broadly positive thesis based primarily on a successful vaccine roll-out across developed economies and continued expected low cost of capital. However, we noted that asset valuations were high and there were bubble-like conditions in some private market segments. We also did not materially change positioning entering 2021 given our longer-term thematic investing approach. Not much has changed in our views or positioning over the last six months, so our note this time will be more succinct than prior versions. As usual, we will cover performance, provide an updated view on key macro thoughts, before completing the letter with a summary of our portfolio positioning. We also touch on two areas of particular interest – inflation (and how to hedge against it), and tail risk protection (essentially portfolio insurance).
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