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C&N Investment Performance 2020

28 April 2020

With the fastest stock market decline ever recorded in the first quarter of 2020, we are very proud to report that Cutcher & Neale Managed Discretionary Accounts not only cushioned the severe impact of the COVID – 19 correction, but outperformed benchmarks and were actually able to make money in these volatile times in 3 out of 4 model equity portfolios.

The largest Cutcher & Neale stock portfolios, the Australian and International models, recorded performance in the 2019 calendar that was stellar, returning 17.76% and 27.32% respectively.

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In protecting our clients’ capital, we felt valuations had become over-extended, and shifted into more defensive assets such as USD cash at the start of 2020. The US in particular was showing signs of excess in the corporate sector with the record high amount of stock “buy-backs”, this is where a company with its cash holdings and debt buys its own shares, effectively pushing up their stock price.

Some corporate chiefs thought it was a good idea to borrow money to commence “buy-backs” inflating corporate debt to USD 10 trillion, almost twice the levels of 2009.

When Apple announced a profit warning in February due to the issues China was facing with Covid-19, we further added to our USD cash position, which appreciated as a safe haven currency, contributing to our International model portfolio performance.  

Whilst we have navigated the first quarter turbulence, the next balancing act is our re-entry into the market.

The opportunities that have and will continue to present themselves in the coming months are very exciting. Stocks that had lofty valuations only several weeks ago are now providing the opportunity of a decade to buy sensational businesses at substantially reduced prices.

The world has changed post COVID-19 and the theme of a digital future just accelerated as the world works from home connecting via the cloud. 

Cutcher & Neale has a proven track record of sound market evaluation and performance - in good times and bad!

Should you wish to discuss this or any other investment related matter, please contact our Investment Services Team on (02) 4928 8500.


Disclaimer

The material contained in this publication is the nature of the general comment only, and neither purports, nor is intended to be advice on any particular matter. Persons should not act nor rely upon any information contained in or implied by this publication without seeking appropriate professional advice which relates specifically to his/her particular circumstances. Cutcher & Neale Investment Services Pty Limited expressly disclaim all and any liability to any person, whether a client of Cutcher & Neale Investment Services Pty Limited or not, who acts or fails to act as a consequence of reliance upon the whole or any part of this publication.

Cutcher & Neale Investment Services Pty Limited ABN 38 107 536 783 is a Corporate Authorised Representative of Cutcher & Neale Financial Services Pty Ltd ABN 22 160 682 879 AFSL 433814.

 

Topics: Investment Market, Australian Stock Exchange, Investor, Stock Market, Sharemarkets, Investment Loans

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