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HomeValue Investing2021 Efficiency evaluation – 2022 Outlook

2021 Efficiency evaluation – 2022 Outlook


2021 overview

2021 was a (for me) surprisingly robust 12 months for fairness markets with double digit development throughout many fairness markets.

In 2021, the Worth & Alternative portfolio gained  +22,5% (together with dividends, no taxes) in opposition to +18,5% for the Benchmark (Eurostoxx50(25%), Eurostoxx small 200 (25%), DAX (30%), MDAX (20%), all efficiency indices together with Dividends).

Hyperlinks to earlier Efficiency evaluations will be discovered on the Efficiency Web page of the weblog. Another funds that I observe have carried out as follows in 2020:

Companions Fund TGV: +38,2% (30.12.) 
Profitlich/Schmidlin: +20,0% (30.12.)
Squad European Convictions (30.12.) +25,0%
Ennismore European Smaller Cos (30.12.) +23,1% (in EUR)
Frankfurter Aktienfonds für Stiftungen (30.12.) +17,3%
Greiff Particular State of affairs (30.12.) +5,5,%
Squad Aguja Particular State of affairs (30.12.) +5,4%
Paladin One (30.12.) +14,6%

It needs to be talked about that this 12 months, the efficiency of most funds clusters a lot nearer collectively than within the “Corona lottery 12 months”, the place returns had been unfold between +35% and -10%. Fortunate me that I’m invested into the most effective performing fund in my peer group ;-). Curiously, the most effective performing fund in 2020, Aguja, was the weakest performer in 2021.

Over the 11 years from 12/31/2010 to 12/31/2021, the portfolio gained +354% in opposition to +169% in opposition to the Benchmark (Eurostoxx50(25%), Eurostoxx small 200 (25%), DAX (30%), MDAX (20%), all efficiency indices together with Dividends).. In CAGR numbers this interprets into 14,7% p.a. for the portfolio vs. 9,2% p.a. for the Benchmark. As a graph this seems as follows:

Chart perf 2021

Present portfolio / Portfolio transactions

New positions:

In January, I added JustEat Takeaway.com and Alimentation Couche-Tard. I truly added to JET in April however then bought in June fully (with a lack of round 17% at 75,5 EUR).

In February, I purchased a 2% place in BioNTech. I’ve to admit that regardless of the small place measurement, the volatility will not be simple for me to abdomen. I bought round 1/3 of the place with a revenue of round 200% comparatively early in order that the remaining place is “revenue solely” which makes it simpler for me to carry for a long term. The final new place in Q1 was Euronext as a “opportunistic” funding.

In Could I began the “Vitality Transition Basket” with 2 new small stakes in Orsted and Aker Horizon. A month later, I added NKT and Nexans to the basket.

In July, Meier & Tobler joined the portfolio as the primary “harvest” from my All Swiss Shares sequence. Different new Swissis had been ABB and  Schaffner. Each have an attention-grabbing Vitality Transition/Electrification facet. ABB is a little bit bit extra opportunistic as a result of anticipated EV spin-off in 2022.

Bought positions

I bought Installux, in addition to my full Journey Basket (Hostelworld, ENAV, JD Wetherspoon, Southwest and Dufry) as I obtained chilly ft early on the 2021 journey season. I additionally bought SFPI (a lot too early) and Agfa.

The present portfolio per 31.12.2021 will be seen as at all times on the portfolio web page. 

Some Portfolio statistics

The weighted holding interval as of 31.12.2021 has been 3,8 years and is inside my goal of 3-5 years. The 10 largest positions account for round 53% of the portfolio, the largest 20 for round 82%.

Allocation by nation (ex Funds):

Nation
FR 19.4%
CH 16.2%
DE 13.5%
UK 13.1%
NO 7.3%
CA 3.8%
SE 3.2%
IE 2.9%
DK 2.8%

Allocation by forex:

Foreign money
EUR 39.7%
CHF 16.2%
GBP 13.1%
different 10.2%
NOK 7.3%
CAD 3.8%
SEK 3.2%
DKK 2.8%

From a rustic / forex perspective, that is clearly a European portfolio, inside Europe it seems fairly diversified. A shock to myself was the comparatively low weight of EUR primarily based corporations. This helped the portfolio a little bit bit in 2021, as many European non-EUR currencies appreciated in opposition to the EUR together with the GBP.

Allocation by market cap (ex funds, money):

Market cap mn EUR Share
0-500 19.8%
500-1000 26.7%
1000-10000 14.2%
>10000 21.6%

The vary in market cap is sort of excessive, from 98 mn EUR on the low finish (Netfonds) to round 76 bn EUR (Richemont). From the angle of US Mega caps, all these shares seem like small caps. General greater than half of the direct held shares are beneath 1 bn EUR market cap which I take into account small caps.

Efficiency evaluation:

“Lively share” vs “do nothing”

The “Do nothing” strategy, i.e. simply letting the Portfolio run from 31.12.2020 and accumulate dividends would have solely resulted in a efficiency of 16,75%, so my “energetic contribution” in 2021 was fairly good (or the 2020 portfolio was not so good…). The primary purpose for this had been to a big extent Biontech and Alimentation Couche Tard and the Electrification basket vs. the Tourism basket who collectively added one thing like 500 bps to efficiency. Additionally the partial money outs for Play Magnus and Siemens Vitality helped. SFPI then again value me a relative 100 bps from the place I bought them.

So a minimum of for me, being energetic in my portfolio appears so as to add worth that offsets the tax affect I’ve at a private degree in comparison with “do nothing”.

Efficiency drivers

The highest 10 efficiency contributors to 2021 had been as follows (absolute contribution):

Stock
Biontech 2.8%
Thermador 2.3%
Richemont 2.2%
Companions fund 2.1%
Perrier 2.0%
Admiral 1.7%
Sixt vz 1.7%
Alimentation couche-tard 1.5%
VEF 1.2%
Netfonds 0.9%
High 10 whole 18.2%

What’s noteworthy is that lots of the most important efficiency drivers had been nicely performing “mid measurement” positions (2-4%) and the most important positions from 2020 (Bare, Admiral, TFF) didn’t do this nicely. Nevertheless that is regular for a long term portfolio as not each inventory can do nicely yearly.

The primary adverse contributor was Zur Rose which was the primary constructive efficiency driver in 2020.

Month-to-month returns and outperformance:

Perf BM Perf Portf. Delta
Jan-21 -0.7% 4.3% 5.0%
Feb-21 2.9% 2.3% -0.6%
Mar-21 5.3% 0.6% -4.7%
Apr-21 2.4% 4.8% 2.4%
Could-21 2.2% 0.3% -1.9%
Jun-21 1.0% 1.6% 0.6%
Jul-21 1.7% 4.7% 3.0%
Aug-21 2.2% 1.8% -0.4%
Sep-21 -3.7% -4.2% -0.5%
Oct-21 3.2% 3.7% 0.4%
Nov-21 -3.4% -0.5% 3.0%
Dec-21 4.4% 1.3% -3.1%

What’s value mentioning right here is that outperformance is at all times “lumpy”, i.e. can change considerably from month to month. The month-to-month returns additionally present that my portfolio will not be a “excessive beta” play.

Annual returns and outperformance:

Perf BM Perf. Portf. Portf-BM
2011 -13.8% -4.1% 9.8%
2012 26.6% 37.4% 10.8%
2013 29.3% 32.8% 3.5%
2014 2.2% 4.9% 2.7%
2015 12.5% 14.1% 1.7%
2016 4.6% 12.4% 7.9%
2017 16.1% 20.9% 4.7%
2018 -15.3% -11.3% 4.1%
2019 27.9% 15.0% -12.9%
2020 4.5% 27.7% 23.1%
2021 18.5% 22.5% 3.9%

What I discussed above additionally applies for annual returns: Outperformance is lumpy. My goal is 3-5% outperformance per 12 months (presently 5,5% since inception), however in any 12 months this could diverge so much. As 2019 confirmed, there will be years that even present a big underperformance as my portfolio is as far “off benchmark” as it may be.

Errors made in 2021

The most important mistake in 2021 was clearly to promote SFPI too early. This was a behavioural mistake (promoting once I was again in constructive territory) in addition to a principal mistake, as I by no means dug deep sufficient into the corporate, after I exchanged my DOM safety shares into SFPI some years in the past.

Different minor errors had been to not add to positions the place I initially meant to take action (VEF, Sixt Vz, Mediqon).

What went nicely in 2021

General, I used to be ready so as to add some new “high quality positions” at affordable costs in 2021, particularly Alimentation Couche-Tard, Schaffner and Meier might be long run holdings if issues end up as I count on. Additionally shopping for some BioNTech regardless of being outdoors my circle of competence turned out to be a good suggestion.

However, promoting shares partially if the value appreciates in a short time, turned out to be a very good technique in 2021. Play Magnus, Siemens Vitality and BioNTech had been instances the place it made sense to take some cash off the desk.

Nevertheless one must be reasonable: This might additionally been solely pure luck, solely time will inform.

What I’ve discovered in 2021

I’ve (once more) came upon that I’m not an investor who likes to have very unstable shares in my portfolio. With Play Magnus, Zur Rose, BioNTech and Bare Wine at instances  I had a minimum of 4 very unstable shares in 2021 and I’ve to say that that is the utmost that I can abdomen. I’ve additionally discovered that an initially comparatively “regular” inventory can develop into a scorching inventory inside a comparatively quick time period.

One other lesson was the affirmation that I’m not capable of predict the relative improvement of my portfolio shares in any given 12 months. Over time, I participated in some “give me your 3 favorite shares” contests and I at all times carry out poorly. The most effective performers are normally shares the place i wouldn’t have anticipated it. Subsequently, a minimum of for me, extra focus doesn’t make sense.

Outlook & Technique 2022

If I look by way of my annual efficiency evaluations, the outlook and technique is nearly at all times the identical: Keep Cautiously optimistic and proceed to do what I’ve been doing and attempt to enhance progressively.

My intestine feeling tells me that I needs to be additional cautious, as 2021 has proven even crazier mini bubbles than within the already loopy years earlier than (EV shares, Crypto, SaaS, Frank Thelen and many others.). Nevertheless this “market timing intestine feeling” has been incorrect extra typically than it was proper so I attempt to ignore it pretty much as good as I can.

One pattern that I described within the Q3 remark appears to be enjoying out fairly quickly: The “Simple Tech” cash actually appears to be over. The momentum darlings are falling tougher than ever. I might be extraordinarily cautious to imagine a “V-Formed” restoration for a lot of of those shares. A few of people who I’ve lined within the weblog (Auto1) are nonetheless considerably overvalued.

I feel we’ll see just a few attention-grabbing results: Initially, there can be a few new “Theranos and Enrons” revealed, each in the private and non-private house. As soon as the cash move is stopping, these “companies” would possibly unravel shortly. I is perhaps incorrect however the truth that nobody is doing actual DD any extra (Tiger World, Softbank, SPACs) makes it very simple for fraudsters. Nikola, certainly one of these frauds that I had lined, would possibly solely be the tip of the Iceberg.

A second impact can be that a variety of excessive development / excessive loss corporations might want to lower promoting budgets and abruptly they may develop into low development / excessive loss corporations.

After all there can be some corporations which can be actually the following Google or Amazon or Salesforce, however hose are only a few for my part.

Nevertheless, as anybody who remembers the Dot.com space, there’s at all times the possibility for one loopy ultimate “melt-up” prefer it has occurred in early 2000 after the preliminary Y2K panic. So for me which means regardless of the attraction, I’ll avoid shorting.

The one concept that I’m considering is to purchase “very far out of the cash places” on the “nothing will ever go incorrect” shares like Google, Microsoft or Apple. As a result of one thing would possibly go incorrect sooner or later in time.

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