Which of our funds are in the money flow?

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

That means we simply hold onto funds that continue to outperform and exit the ones that underperform. On November 27th2014, we took a good look at the returns of our five funds, the returns of the FTSE 100 and returns of the NASDAQ Composite. This is what we discovered:

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

The laggard

When this data was collected on the 27^th of November 2014, the laggard in our portfolio was Fund D. However it was demonstrating outperformance over the week and monthly periods measured. Because it was our laggard, we next took a look at its performance since purchase and compared those returns with the FTSE 100. This was to see if it was outperforming our UK benchmark or underperforming it since we bought it. Take a look at this table and you’ll see that since it was bought, it’s made a positive return and beaten the FTSE 100 by over 5%.

Yes, the data concluded that Fund D had ‘outperformed’ the FTSE 100 over the last 21 weeks and helped to confirm our decision to keep hold of it.

Our outlook for 2014 and beyond

Year to date we are sitting on a gain of 9.7% versus the FTSE 100’s loss of 1.0%*. After making a 23.1% return in 2013 versus the FTSE 100’s 14.4%, outperforming the Footsie so far this year by almost 11% is extremely encouraging. It’s also comforting to know that the three ‘historically’ strongest months of November, December and January have begun. As we said last month, ‘….we expect that during the next three months that the market will rally hard and fast.' However with November’s returns far exceeding our expectations, it probably means December will experience a period of consolidation. But if we do get the traditional ‘Santa Claus rally’, and we add to these gains, we’d see it as a wonderful Christmas bonus.

The great news is that the fund switches we made in our portfolio over the summer months have really paid dividends. It’s been an incredible 4-month turnaround and hard to believe that on July 25^th this year we were sat in a net loss of 2.1% versus the FTSE 100’s gain of 1.1%. Beyond 2014, we expect solid performance from the equity markets and this means that if you are a long-term investor like us, and have the courage to stay in the game, the future is looking bright.

* Performance data collected 5th December 2014.

Exceeding performance expectations

Our aim is to outperform the FTSE 100 and we are proud of our 23.1% 2013 return which some would say is impressive and even more so when compared to the FTSE 100’s 2013 return of 14.4%. As you can see on this bar chart, we’ve also delivered solid returns over the last 5 years** and managed to make an average annual gain of 14.5% versus the FTSE’s 8.8%.

** 31st December 2008 - 31st December 2013. ISACO investment performance verified by Independent Executives Ltd.

Long-term performance

If we go back even further, since beginning investing back in 1997, we’ve outperformed the FTSE 100 by 60.2% which means we’ve beaten the main UK stock index on average by 2.4% per year***.

*** 31st December 1997 - 31st December 2013. ISACO investment performance verified by Independent Executives Ltd.

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.

About ISACO

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.

* Performance data collected 5th December 2014.
** 5 year performance: 31st December 2008 - 31st December 2013. ISACO investment performance verified by Independent Executives Ltd.
*** Long-term performance: 31st December 1997 - 31st December 2013 ISACO 91.3%, FTSE 100 31.1%. ISACO investment performance verified by Independent Executives Ltd.
**** 15th November 2012: Internal estimation of total ISA and pension assets owned by ISACO Investment Team and ISACO premium clients.
***** 5 year performance: 31st December 2008 - 31st December 2013. Long-term performance: 31st December 1997 - 31st December 2013 ISACO 91.3%, FTSE 100 31.1%. ISACO investment performance verified by Independent Executives Ltd.