On 9 November 2015, AtlasTrend launched a selection of managed funds investing in some of world’s most thriving trends. Yes, the AtlasTrend Online Shopping Spree Fund and the AtlasTrend Big Data Big Fund just turned one year old.
The following information does not take into account your personal objectives, financial situation or needs. You should consider if the relevant investment is appropriate having regard to your own objectives, financial situation and needs.
In hindsight, we couldn’t have picked a more volatile time to launch the funds. Share markets declined dramatically in January 2016 over concerns about a slowdown in China. The UK voted for Brexit in June and of course Donald Trump became the US President-Elect in early November. Wow, what a year!
With all the global uncertainty, no wonder the global share market (as measured by the MSCI World Net Total Return Index) declined by -5.7% in Australian dollar terms for the 12 months to 9 November 2016.
So how did AtlasTrend’s investment performance compare?
Please note investment returns are not guaranteed. Past performance is not an indicator of future performance.
Any secrets on how AtlasTrend achieved this significant outperformance?
We’ll be honest, making money (and minimising losses) in a falling market is not easy. Like many things in life, the way we’ve achieved this is by being systematic and disciplined. Here are the top 4 things we’ve done that have contributed to the outperformance.
1. Turn down the volume
The past 12 months have been filled with major global events that have significantly impacted the share market. However, the impact of many of these events only lasted a few weeks. Being able to tune out this constant geopolitical noise is very important to help avoid making short-term decisions based on emotions rather than fact.
Our tip: Turn down the volume on the blanket TV coverage of geopolitical events. Otherwise, you might get caught up in the emotion of these events which may lead you to buy or sell for the wrong reasons.
2. Ride the trends
Unless there is a global event that causes prolonged worldwide fear (e.g. a world war), a lot of long-term trends that are occurring will continue to grow. Let’s take big data as an example. Irrespective of who is the US president or whether the Chinese economy slows down substantially, the trend towards exponentially more digital data being generated worldwide is practically irreversible over the next decade.
Our tip: What’s happening now that with little doubt will grow substantially and irreversibly over the next decade? Invest in it.
3. Be disciplined, use technology
Investing is like any other purchasing decision. It is easy to become emotionally attached or focus too narrowly on the shares you already know and like. To overcome this, we use technology to help us regularly review around 5,000 listed companies in a systematic and disciplined manner. This enables us to focus our fundamental research and analysis on the most prospective investments within our investment universe. This includes companies which we may never have thought about investing in before.
Our tip: Your time is precious, use technology to help you filter out the things you should never invest in and concentrate on the opportunities you should invest in.
4. Be prepared to make mistakes
Have we made mistakes in our online shopping and big data funds even though they have significantly outperformed the broader global share market?
Yes, of course, we have. These mistakes were usually on our smaller investments rather than our larger core investments. There is no full certainty when it comes to investing so it is very important to size your investment amount depending on your confidence level.
Our tip: Never bet the farm as everyone makes investment mistakes. Deciding how much to invest is just as important as what to invest in.
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