I am very proud to announce that the CCM Intelligent Wealth Fund has been performing very well recently. So well in fact that it is now the best performing fund in the Investment Association’s Global sector, 1st out of 214 funds, over the last 3 months with a return of 19.29%, 3rd out of 210 funds over 6 months with a return of 34.56% and over 12 months 34th out of 205 funds with a return of 32.23%. Source: Funds Library 3.3.21.
What has been the reason for this excellent performance run? Well interestingly, nothing much has changed. We continue to invest in the seven themes of the fund. We continue to invest in undervalued companies in undervalued markets. We continue to invest in value stocks.
Value stocks have been the neglected share type in recent years during which time growth stocks have been the vogue backed by the growth in demand by passive funds. Most value stocks are smaller companies which do not qualify for inclusion in many popular indices such as the FTSE 100 Share Index. As a result, smaller companies’ shares tend to be neglected because the demand to buy these shares is reduced.
Now things are changing. Value stocks are finally re-emerging as a popular asset class. Undervalued stocks in undervalued markets are becoming recognised as bargains. The CCM Intelligent Wealth Fund invests in many such shares. We not only invest in seven themes of the future but we also invest strategically by focusing on investing geographically where there are the greatest growth prospects.
So our fund has more of an emphasis on investing in China, Japan, Emerging Markets and the UK and less in the US than a typical global equities fund. Chinese equities are highly under-represented in global equities funds whereas US equities are over-represented. This doesn’t make much sense when China’s share of global GDP is second only to the US. As China’s economy will overtake the US’s and grow much larger in future years it makes sense to invest proportionately more into Chinese equities than US equities.
Our largest holdings are however in UK equities. Measured against global stock markets the UK stock market is at its most undervalued level since 1973 which was just two years before we joined the Common Market (the EU). The UK stock market has been depressed for 4 years and 8 months ever since the Brexit Referendum result. Furthermore, the UK’s handling of the coronavirus pandemic has been very poor by international standards which has led to 3 national lockdowns and a more negative effect on our economy than most other countries.
However, since we approved the BioN Tech vaccine in November last year the UK has become the most successful large nation in vaccinating its population. It is the first sign of how we can outperform the EU since all ties were severed with the bloc on 31 December. The EU in the meantime is lagging way behind the UK in its vaccine rollout. What this means is that the UK will emerge from both Brexit and Covid-19 in a very strong position economically. UK shares have already rallied very well since November last year. We are very confident that investing heavily in the UK will reap dividends for the fund.
Our focus on investing in our seven themes of the future will also ensure that the fund will continue to perform very well because we are focused on sectors which we consider to represent the greatest growth prospects.
So we continue to be confident about the CCM Intelligent Wealth Fund’s prospects. If you haven’t already invested in the fund what are you waiting for? You know it makes sense**.
*The CCM Intelligent Wealth Fund’s return in the calendar year 2019 was 14.56%. In 2020 the fund’s return has been 9.29% (source: Funds Library). The FTSE 100 Index return for the same period was down by -9.8% (source: FTSE Russell).
The fund’s benchmark is the Global Index – Investment Association Global Sector, not the FTSE 100 Share Index.
**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.
