Why our discretionary fund management service is set to benefit from changing economic circumstances

When we launched our discretionary fund management service (DFM) we chose an investment strategy that we thought would succeed for a number of reasons.

We anticipated interest rates increasing, inflation rising, commodity price increases especially gold, share price growth, bonds performing badly and property funds struggling.  

14 months after launch we stand by our predictions yet returns have been disappointing so far.  The first 9 months of 2021 investment performance was excellent but over the last few months, it has underperformed.  

This is surprising because our DFM service has been specifically structured to benefit from the changing economic circumstances that we predicted.

For example, inflation has started to soar over recent months.  Interest rates have started to rise.  Commodity prices have started to rise too.  Even gold has risen recently breaking through the $1900 barrier.  

Shares performed relatively well for the first 9 months of 2021 but have faltered in recent months, especially as a result of the fall in value of technology stocks in the NASDAQ Index as well as Russia’s recent invasion of Ukraine.  

Bonds haven’t been badly affected yet but they will perform very poorly once interest rates rise more.

Commercial property funds haven’t been fully impacted just yet but they will most certainly underperform due to the struggles of high street retailers and the shortage of office workers.

Our decision to invest 25% into the CCM Intelligent Wealth Fund hasn’t worked so far either.  Our fund performed extremely well up until September last year but it has been disappointing since then.  A major reason for this is the fact that 40% of NASDAQ stocks (technology) fell by 50% or more.  As our fund is invested 68% in technology stocks inevitably this took its toll on our fund performance.

However, this is purely a case of market irrationality.  We have an excellent portfolio of shares invested in high growth companies which churn out significant, rising profits year after year.  As earnings growth results in increasing share prices, our portfolio should have risen in value substantially over the last 6 months.  Instead, a number of these fantastic companies have experienced share price falls.  

We know this is not sustainable and a large turnaround is due.  We are very confident that once share prices start to rise our fund will achieve exceptional returns once again. 

We believe our DFM service will start to gain traction now that most of our predictions have become true albeit only of late.

All things being equal, our DFM service should now start to outperform other DFM services comfortably because it is perfectly positioned to benefit from changing economic circumstances.

So if you are looking for a discretionary fund management service with great prospects look no further than Minerva Money Management.  You know it makes sense.*

*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. This blog is based on my own observations and opinions.