2020 Full Year Earnings

We are pleased to announce our Private Company Trading Results.

Our business generated a 34.15% return for the full year of 2020 on our capital base.

Q1 was dominated by the global spread of the COVID19 virus and the concurrent economic shutdowns. For markets, this resulted in a massive re-pricing of risk assets with commodity, equity and fixed income volatility reaching all-time highs as spot markets dropped and even safe-haven assets declined as investors sought liquidity.

Q2 brought a bifurcation between markets and the economy. The start of an equity market rally centred around technology stocks and massive fiscal support programmes counter-balanced the re-structuring / bankruptcies across airlines, hotels and retail sectors. The Russia-Saudi oil price war intensified and as structural flaws in certain retail derivatives became apparent this helped to drive WTI futures into negative territory.

Q3 confirmed the US Federal Reserve would move to use average inflation targeting and imbed a narrative of “lower for a lot longer”, while Central Banks globally continue to ask policymakers to deploy more fiscal resources into the economy.

Q4 crystallised Novembers event risk in the highly contentious US election, delivered multiple vaccine solutions, confirmed a US Fiscal Stimulus package with ongoing Federal Reserve Support, announced Yellen’s return, the Tesla inclusion into the S&P500 went without a hiccup, Santa Claus delivered to the parents as well with the year-end crypto asset rally. So with all the key market events absorbed into the market pricing the question is are we priced for perfection?

Looking forward to Q1 2021 we continue to see risk and derivative markets pricing (and mis-pricing) material volatility in several pockets of the market, we see two principal, and frustratingly conflicting, risks ahead; the deflation and the inflation narratives.

The risk factors we are watching within derivative markets are the pricing of forward earnings and dividend distributions needed to support extended price ratios We are being selective with pockets of volatility exposures in 2021 our current focus is within Commodity Assets, Financial, Healthcare and Taiwanese equities. While we remain cautious on the 3rd wave of COVID infections, keenly focussed on any material re-structuring & bankruptcies (retail, airlines, food & beverage, cinemas) and any dislocations in the operating structure of credit markets.

We’d like to thank our trading execution partners from Interactive Brokers, IG Index and Saxo Bank. Thank you to both Chatham House and Geopolitical Futures for their unique perspectives.

Re-affirming our social commitment we continue with our 2020 donation programme into 2021 with Feeding Hong Kong.

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