VMG’s 2020 PERFORMANCE
Updated: 2 days ago
2020 has proven to be a year full of unexpected hurdles in the economic market. VMG has had to adapt to all of those and pull through financial success for our clients. Below are our metrics as compared to the international HFR Absolute Return Index. Our Focus Fund Strategy outperformed Berkshire Hathaway’ s Cl A fund by +1500 bp (15%) | YTD June 3, 2020.
For example, in ’05, ’06, ’08, ’09, ’10, ’11, ’12, ’13, ’14, ’20, our Focus Fund Strategy was focused, liquid, hedged, and growth-oriented with controlled risk:
consider HFR Absolute Return Index +4.37% | YTD December 27, 2019
Focus Fund Strategy Return Gross +11.8% | YTD December 31, 2019
Focus Fund outperformed HFR Absolute Return Index since Inception 3/31/09
129 MONTHS in historic, difficult investment periods
+15.5% June, +2.7% July, +3.2% Aug, +1.2% Sept, + 13.9% | YTD Nov 10, gross
compare: Warren Buffet Berkshire Hathaway – 8.9% YTD Aug 20
HFR Absolute Return Index return – 0.8% YTD Aug 19
Now, looking back: in March ‘09-Dec ‘19, our Focus Fund Strategy yielded a return of +325% vs. +8.75% by the HFR Absolute Return Index 129. VMG launched in March of 2009 when we told clients march could be the best equity opportunity in a generation.
Upon an extensive analysis of 1929 conditions, we concluded that 2008 was quite different. Recovery could be very rapid. That day, we deployed all USD Cash, held since early ’08. We launched on March 31, 2009. VMG is always ready to act when we see opportunity.
Fast forward to another economic decline. In February 2019, our research concluded that it would benefit clients to increase risk control now, global equities are too expensive.
In November 2019, we reached fully invested. We continued to overweight tech by buying Boeing too early, stopped out, current weighted avg cost $132.99 per share as of June 3, 2020. We expected a 5-year hold horizon.
In April 2020, our research concluded the depression risk has passed. More aggressive adds included Airlines. VMG added Atlas at $25.45 a share and Barclays ADRS at $4.29 a share. We favor continued overweight tech, underweight emerging markets, and now reduced bonds. We added certain REITS including the Retail Mall operator Macerich, and began adding in April at $6.76 a share (it closed June 3, 2020 at $11.16 a share).
In June 2020, we were concerned the market outpaced reality, just as we expect in all V shape recoveries like 2009. We protected gains early and finished the month of June with a +15.4% return.
Back to stock picking for July, favoring banks and tech. COVID spread rapidly in the U.S. and deeply affected the market for months. So, we hope to see further buying opportunities in equities and real-estate bonds as we did in April.
In July and August, we continued to protect the portfolio, expecting significant volatility within the next few months. Cash levels were significant, and we seeking opportunities in the thinly traded summer days.
Since then, VMG has been working to constantly adapt to the market in the wake of COVID-19. We are constantly updating our public metrics on our website.