The Equitile Resilience Fund aims to deliver capital growth by investing in large, growing companies in the developed markets. It is managed according to our core investment principles and uses the Equitile Fair Fee Model.
Latest Overview GBP - June 2020 (print version)
Despite persistently high COVID cases in the US, and, some isolated ‘second spikes’ elsewhere, June has seen both the global economy and stock markets continue recovering from the lockdown. That said, the recovery is far from uniform. The lockdown has caused a significant reshaping of the economy for both public and private sectors. Traditional companies have significantly lagged newer technology companies; the NASDAQ has outperformed the DOW by over 20% year to date. In addition, oil has fallen in price by around 33% on the year while gold has risen in price by 18% in the same period. We believe, the underperformance of both the DOW and Oil, relative to the NASDAQ, are symptomatic of an accelerating shift from the old ‘physical’ economy toward the new ‘virtual’ economy. While the outperformance of gold is anticipating years of monetised deficit spending, which will be required as governments attempt to alleviate the social costs of high unemployment as the workforce retrains for the different skills required by the increasingly virtual economy.
This backdrop leaves investors with two clear challenges; firstly, to maintain sufficient exposure to high growth technology companies; secondly, to protect the real value of investments from the inflationary effect of sustained monetised deficit spending. We believe your portfolio is already well positioned for this economic environment. Nevertheless, in June we made some minor adjustments to your portfolio, further increasing your exposure to both technology companies and to companies likely to benefit from ongoing monetisation.