9/7/2020 12:00:00 AM

A Message from Mike: Team gains

It’s not often in your career such large outperformance is possible, let alone achieved. 

However, August will go down as a one of our best months on record, with all funds in positive territory and two funds achieving over a 10% return. Notable mention is to the Australasian Growth 2 Fund which was up 18.4% and like a sprinter getting faster, the Fund has broken my one-month performance record, which has stood since April 2009, three times this year. The investment team has done an incredible job navigating an extremely challenging environment.

Here’s a table of Pie’s best performance months.

table_op.jpg


In another August milestone, we have now made over $540m for our clients since inception in 2007. This is something I am very proud of and it could not have been achieved without the help and support of many people. There are too many names to single anyone out, but I am grateful for the support and contribution (big or small) you’ve made to Pie’s success. Thank you.

Six months on from Covid-19

In late February and early March, global activity plunged as the world went into Covid-19 lockdown, sparking a collapse in equity prices. As the world came to grips with the pandemic, central banks and governments went to work with an unprecedented level of monetary and fiscal stimulus. Low interest rates, quantitative easing, job-keeper packages, wages subsidies, mortgage deferrals and business loans, combined with a huge acceleration of online shopping and economic digitisation have set the scene for a recovery in equity prices led by technology stocks. While the end of the pandemic is not (yet) in sight, we can use the experience of the past six months to help us draw some conclusions about what to expect going forward.

Can this rally continue?

Typically, asset-price surges end when financial conditions tighten. Central banks have calmed and reassured investors they are in no hurry to raise rates. Indeed, recently the US Fed said they will allow inflation to overshoot in the short-term to keep rates down. This has already seen gold tick higher and the US dollar remain under pressure. In summary, central banks won’t be removing the punch bowl any time soon. The shift to the online world appears permanent. So, while growth rates won’t continue at 100%+ month on month, they will remain high. 

However, there could be a shift in market leadership if a Covid-19 vaccine is developed. If/when this happens, I would expect to see a rotation in the market out of tech and back into cyclical Covid-19 recovery plays [like retail and travel]. Finally, market volatility could resume around the US election, scheduled for November, but is unlikely to derail any of the key themes mentioned above.

Therefore, as always, if the facts change, we will shift our investment strategy accordingly. But for now, we are comfortable existing trends will continue.

Mike Taylor, Founder and CEO


Past performance is not an indicator for future performance. This is not intended to be financial advice and does not take into account any particular person’s circumstances. Before relying on this information, please speak to an independent financial adviser.

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