While there are plenty of bearish commentaries and warnings about the significant effects of this pandemic being ahead of us,share prices are telling us there is a good degree of optimism about how this ends. But for what it is worth the high profile commentators over the age of 60(Buffett, Gates, Zell, Howard Marks) are all still quite cautious at a time when:
- the S&P500 and the NASDAQ are both now up over the last twelve months;
- the Australian market is only -10% lower than a year ago;
- the Australian market is at same level it was in Dec 2018, when the only real problem confronting the market was slightly higher interest rates.
Things are actually different now. We face the very real prospect that unemployment stays high as Australian businesses do not have the confidence to keep all their full time employees once JobKeeper ends. Surely businesses, badly scarred by recent events, will hold back to some degree on almost all categories of their expenses and capital requirements in the coming six to twelve months having managed to get through this period. There is also around $150bn of mortgages on repayment deferrals as well as around $48bn of business loans.
See attached for the full report.
During December 2020 the Fund returned 2.11% versus the S&P/ASX 300 Accumulation Index of 1.32%, outperforming the market by 0.79% (after fees). Overweight positions in Renewable Energy and Transition Commodities and an underweight position in Healthcare contributed to relative performance while an overweight position in Food Products and an underweight position in Information Technology detracted from relative performance.
Ethical Partners has made a submission to to the inquiry on the Climate Change Bill. In our view it is clear that we desperately need whole of government support around the important elements of this bill.
Biodiversity is a very important area of engagement for us at EPFM, and an area of increasing interest for investors. Experts believe that we are in the midst of the Earth’s sixth mass extinction event -some 75 per cent of terrestrial and 66 per cent of marine environments have already been severely altered by human activity and one million species face extinction – many within decades.
During October 2020 the Fund returned 2.85% versus the S&P/ASX 300 Accumulation Index of 1.89%, outperforming the market by 0.96% (after fees). Overweight positions in Insurance stocks and an underweight position in Metals & Mining contributed to relative performance while overweight positions in Consumer Staples and Media & Entertainment detracted from relative performance.