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 January 29th 2015, we looked at the returns of our five funds and compared them with the returns of the FTSE 100, our performance benchmark. This is what we discovered:
This information is taken from The Big Picture, to download a sample copy please just click here.
1 Performance data collected 29th January 2015.
The laggard
When this data was collected*, the laggard was Fund B. That was interesting to see because for the last few months, Fund D has been the laggard. But what a mistake it would have been should we have decided to exit it because it’s so far surged 7.5% this year!2. With Fund B it is of course disappointing to see it have a poor start to 2015 however we are not giving up on it quite yet, especially with it outperforming the FTSE 100 over the last three months. We’ve also noticed that the CLASSIFIED has recently performing well and that will also have a positive effect on the fund.
2 Performance data collected 29th January 2015.
Performance since purchase versus FTSE 100 benchmark
With Fund B having a shaky start to the year, we decided to take a look at its performance since purchase and compared those returns with the FTSE 100 – to see if how it was performing versus our benchmark. Take a look at this table and you’ll see that since it was bought, it’s beaten the FTSE 100 by almost 8%. Yes, the data concluded that Fund B had ‘outperformed’ the FTSE 100 from date of purchase through to January 29th. This helped to confirm our decision to keep hold of it for now but from here we will be keeping a very close eye on it.
3 Fund B was purchased 8th July 2014. Data performance comparison calculated 29th January 2015. ISACO investment performance verified by Independent Exceutives Ltd.
Our outlook for 2015 and beyond
We are extremely proud of our strong performance so far this year. We are currently sitting on a return of 7.2%4 compared to the FTSE 100’s 3.7%4. After making 7.4% in 2014 compared to the FTSE 100’s -2.7% and a 23.1% return in 2013 versus the FTSE 100’s 14.4%, we are delighted that our investment decisions appear to be working out quite well. Making a very strong start to the year has caught us by surprise because only last month we said…
’…we believe that we’ll experience flat or slightly negative returns for 2015.’
For now and to err on the side of caution, we are sticking with this forecast due to the robust gains we’ve made over the last two years. We are also adhering to it because we currently only have one month behind us and another eleven to go and that means things could change dramatically over the course of the year.
The important thing to remember is that right now we are in a strong bull market and that means until we see an impending bear market on the horizon we will be sitting tight and most probably staying fully invested throughout 2015. Our outlook for the longer term (5-10 years) is that we believe the markets will be much higher than they are right now.
From here we are therefore happy to sit out what we think will be much ‘milder’ correction periods than the ones investors experienced 2000-2002 and 2007-2009. 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.
4 Performance data collected 28th January 2015. ISACO investment performance verified by Independent Executives Ltd.
ISACO 2015 performance
Our aim is to outperform the FTSE 100 and we are proud of our 7.2%5 2015 return which some would say is pretty good when compared to the FTSE 100’s 3.7%5.
5 Performance data collected 28th January 2015. ISACO investment performance verified by Independent Executives Ltd.
ISACO 3 year annualised performance
We are also pleased with the returns that we’ve made over the last three years6 too. From the beginning of 2012 to the end of 2014, we have annualised 9.5% versus the FTSE 100’s 5.7%.
6 December 31st 2011 - December 31st 2014. ISACO investment performance verified by Independent Executives Ltd.
Long-term performance
If we go back even further, since beginning investing back in 19977, we’ve outperformed the FTSE 100 by 77.9% which means we’ve beaten the main UK stock index on average by 2.9% per year.
7 December 31st 1997 - December 31st 2014. 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’; a unique service that allows you to look over our shoulder and buy the same funds that we are buying. Together with our clients, we have an estimated £57 million actively invested in ISAs and pensions8. Clients like us because we have a track record of ‘beating’ the FTSE 1009. Over the last 17 years, we’ve outperformed the Footsie by 77.9%. 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 8–10% 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.
8 November 15th 2012: Internal estimation of total ISA and pension assets owned by ISACO Investment Team and ISACO premium clients.9 December 31st 1997 - December 31st 2014 ISACO 105.5%, FTSE 100 27.6%. ISACO investment performance verified by Independent Executives Ltd.
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