We are, as the Chinese Curse goes, in interesting times.

Over the year so far markets and Oil have collapsed in price and largely recovered. The FTSE 100 recent peak pre-Covid was 7403 in February and fell to 4933 and is now 6203 as I write this piece. A fall of some 33%.

With the Lockdowns around the world trade and business have had a 3 month holiday which has meant that profits and hence dividends are down.

So, what is the way forward?

The usual pattern of pandemics is that there are usually three waves before we get to a very low background level and so a second wave is a given. It is the height of the wave that matters and that will depend on how well the release from lockdown is managed.

The Lockdown has also brought forward the use and more importantly the acceptance of new ways of doing business. Internet buying has grown even faster and Video meetings using Zoom or Team or Facetime of any of a dozen others has meant fewer, old-style,  meetings have taken place. That means that there is less travelling. Less pollution but more time to pay attention to clients that have urgent needs.

A further silver lining has been the almost a re-birth of community spirit that has unfortunately been paralleled by some divisive issues.

Our portfolios have taken far smaller hits than the markets generally, about a 12% versus 33%. That is because we took the decision five years ago to look for areas that have long term positive trends that are largely immune to unexpected shocks to life.

So, going forward, the core of the portfolios does not need to change. The fringe funds, however, are changing.

Most notably in the energy sector. Our one selection in this area was Junior Oil which without notice or option shut its doors, a victim of panic selling. We have had the Quarterly Investment Committee meeting a fortnight ago to approve the thinking and replacements. The Committee has decided to rule out MFM or Junior Find management groups for the foreseeable future as a result of their unconscionable conduct.

We have had the approval of the Committee for two more broadly based funds that include some oil. However, there are now some funds that concentrate more on renewables and have enough holdings to be useable, for most people, at some level.

More excitingly, we now believe that we can make a portfolio 100% from funds that follow the requirements to be graded as ESG.  That is Environmentally, Sustainably and Governance qualifying.

This is the catchall for the funds that used to be described as Ethical or similar.

If you are interested, and we do not already know of this preference, do let us know.

We will be discussing these options with you at review in any event, as appropriate.

In the meantime, Stay Safe and if you are not comfortable with something, don’t do it even if the Government says that it is fine.  Its your LIFE not theirs.

Kind Regards

Jeremy Marsh

MD