Which of our funds are in the money flow?

Posted by Stephen Sutherland on Wed, Jan 22, 2014 @ 01:30 PM

Each month we like to make sure that the funds we own are acting right. In our opinion, as well as long-term performance being an important factor in fund selection, the short-term performance of a fund is very important once you own it. It’s vital because we’ve noticed that strong funds tend to get stronger and weak funds tend to get weaker.

This information is taken from The Big Picture, to download a sample copy please just click here

On December 27th 2013, we took a good look at the performance of the six funds that we own, our ‘total’ portfolios performance, the performance of the FTSE 100 and performance of the NASDAQ Composite. This is what we discovered*:

describe the image

We like to remind ourselves that by keeping a close eye on short-term periods, it can help you act quickly should you notice that one or more of your funds are behaving poorly. The time periods that we like to measure in the short term are weekly, monthly and three monthly. To know how well a fund has recently been performing, we simply compare their returns to the NASDAQ Composite and the FTSE 100. Ideally we like to see each fund we own outperforming the FTSE 100 in all three time frames and if it outperforms the NASDAQ we see it as a bonus.

Our chief aim – beating the market

Even though we do try to beat the NASDAQ, our real goal is to outperform the FTSE 100. This means that the most important question that we need an answer on a daily basis is: how have we been performing versus the FTSE 100? As you saw in the table above, the good news is that our ‘total’ portfolio has outperformed the FTSE 100 over weekly, monthly and 3-monthly time frames. In a nutshell, that’s all that matters and we don’t get too hung up if one or more of our funds in our portfolio are underperforming, especially when 83% of the portfolio is showing outperformance. However, it is always good to keep in the back of your mind the ones that are underperforming should a switch be necessary. 

Fund D remains on our radar

We remain unhappy with Fund D’s recent performance. Even though it makes up only 17% of our total portfolio, it’s clearly been underperforming for a number of months. But we haven’t given up on it just yet, because we still believe that it could come to life very soon. Why do we think this? The reason is that on December 26th, the Nikkei 225 broke above and closed above its May 23rd high of 15,942.60 (Point K), which was the highest high it had previously made in 2013. With the Nikkei has recently bursting through a key area of resistance, it helps confirm to us that it is acting well. So for now we remain bullish on Japanese equities and that means we want to be invested in them.

The Big Picture January image 6 LARGE 

On the back of this information, we’ve decided that we will give Fund D a little more time and hopefully it will get a shot in the arm on the back of the Nikkei recently surging forward. Of course we have not ruled out a ‘switch’ into another fund.

Our prediction made early 2013

At the beginning of 2013, we said that we expected to see the FTSE 100 make a ‘2-year’ return of approximately 30-35%. We also said that we felt confident that over the period we’d beat the FTSE 100 and we still stand behind that statement. So far we feel that we and the market are on track for this two year goal. We closed out 2013 with a return of 23.1% and right now we are just entering January, which historically has been a strong market month. Beyond 2014, we believe we’ll continue to experience solid performance from the equity markets, however we also expect volatility on the journey. If you are a long-term investor like us, and you have the stomach to stay in the game, the future is looking bright.

This information is taken from The Big Picture, to download a sample copy please just click here

As always, if you have any questions or thoughts on the points covered in this post, please leave a comment below or connect with us @ISACO_ on Twitter. 


ISACO specialises in ISA and SIPP Investment and is the pioneer of ‘Shadow Investment’; an easy way to grow your ISA and SIPP at low cost. Together with our clients, we have an estimated £57 million actively invested in ISAs and pensions**. Clients like us because we have a great track record of ‘beating’ the FTSE 100***. Over the last 16 years, we’ve outperformed the Footsie by 60.2% and over the last 5 years, we’ve averaged 14.5% each year versus the FTSE 100’s 8.8%. You can find us at www.ISACO.co.uk.

What is Shadow Investment?

Picking the right fund for your ISA and SIPP is not exactly the easiest job in the world. And knowing 'when' to buy and 'when' to exit is even more difficult! Our ‘Shadow Investment’ Service is here to help. Our service allows you to look over our shoulder and buy the same funds that we are buying.

When we are thinking of buying a fund, we alert you so that you have the opportunity to buy it on the same day that we buy it. We also tell you about when we are planning to exit the fund. You control your investment account, not us. You can start small and invest as little or as much money as you like.

By knowing what we are buying, when we are buying and when we are exiting, throughout the year you can mirror our movements and in effect replicate our trades. This means you have the opportunity to benefit from exactly the same investment returns that we get. Our investment aims are 10–12% per year.

We are totally independent, fully transparent and FCA compliant. We’re warm, friendly and highly responsive and it’s a very personal service that gives you direct access to the Sutherland brothers; ISACO’s two founders.

Who are ISACO’s clients?

Clients who benefit most from our service have over £250,000 actively invested and the majority of them are wealthy retirees, business owners, self-employed professionals and corporate executives. We also have clients from the financial services sector, such as IFAs and wealth managers.

Do you have questions?

To have all your questions answered, call 0800 170 7750 or email us at: info@ISACO.co.uk.

** November 15th 2012: Internal estimation of total ISA and pension assets owned by ISACO Investment Team and ISACO premium clients. 
*** Long-term performance: December 31
st 1997 - December 31st 2013 ISACO 91.3%, FTSE 100 31.1%. 5 year performance: December 31st 2008 - December 31st 2013. ISACO Investment performance verified by Independent Executives Ltd.

 To download our free report 'A Golden Opportunity' >> 

 To download our Shadow Investment brochure >>

 To start your 14 day free 'no obligation' trial of Shadow Investment >> 

Topics: Investment outlook, Investment news