Mechelany Advisors’ MODEL PORTFOLIO has been running in a fully transparent way since January 1st 2014. Its Purpose is to implement the conclusions of our research analytical process in a portfolio managed using institutional liquidity, diversification, risk management and asset allocation processes. In our TRANSACTION UPDATES we keep our reader informed in real time of the transactions in our MODEL PORTFOLIO
Managing Money is about delivering performances
Managing Money is about delivering performances and, at Mechelany Advisors, we go even further by managing money in a fully transparent way, day by day.
Once in a while, it is good to analyse our performances and compare them to what investors could have had had they been invested in other markets, funds ETFs for even hedge funds.
in the tables below, We compare our Model Portfolio to the world’s main equity indexes .
As at July 18th 2021, Mechelany Advisors’ MODEL PORTFOLIO is up + 59.02 % year to date and a cumulative +385.35 % since inception 7.5 years ago, on January 1st 2014
This represents an IRR of 23.45 % per annum over 91 months of management
Comparison versus the World Indexes
Using the Indexes for the four main MSCI Benchmarks, since 31 Dec 2013, they have delivered an average cumulative performance of + 59.2 % while the MSCI IShares ETFs have delivered an average of + 55.3 %.
Of the lot, Emerging Markets added only 28 % against 80 % for the Developed market boosted by the spectacular performance of US equities,.
Mechelany Advisors’ MODEL PORTFOLIO delivered 320 %, or 6.5 x more performance, having almost quadrupled when a passive investment into these ETFs would have barely added 55 %
Comparison versus American Markets
The 7.5 years period saw a massive outperformance of the US markets vis a vis the rest of the world. This performance is due to a better efficiency, more corporate earnings growth, more leverage of US corporations and a massive phenomenon of valuation expansion that has taken the market to the most expensive readings in history.
The MSCI Information technology sector delivered + 347 % cumulative performance, making the NASDAQ up 245 % over the period and the MSCI Growth Stock Index up 254 %.
By contrast, Mid caps – Russell2000- only delivered 85 %, the MSCI Value 90 %, Pharam 95 % and the Dow Jones Industrial 109 %
Despite being staunched Value Investors, Mechelany Advisors’ MODEL PORTFOLIO outperformed each and every one of these indexes, delivering 2.26x more performance than their average, and 140 % more than the NASDAQ Index.
In American Emerging Markets, Brazil stood out in local currency terms while Mexico was a clear underperformer
Comparison versus European Markets
European Equities performed poorly since the 2007 crisis with an average cumulative performance of only +29.27 % in 7.5 years. The Netherlands and Germany stood out while Spain, Portugal and Greece were clear money losing propositions.
Europe’s largest capitalisation only added 29.8 % over the period, while the 600 largets added 30 %
With a 356 % outperformance, our MODEL PORTFOLIO delivered 12.8x the performance investors would have had by investing in the European Equity markets.
Comparison versus Asian Markets
Asia is the world’s largest economic zone and the most populated. However, it covers very wide disparities in economic realities and organisation of societies between Japan, China, Vietnam or Indonesia.
Vietnam and India did shine over the period with 157 and 151 % increases respectively, China and Taiwan averaged 100 % while while Hong Kong, Thailand and The Philippines only averaged 20 %. Indonesia, Singapore and the Hong Kong Listed Chinese Shares HSCEI Index are still in negative over the period.
Despite our large exposure to Chinese H-shares over the period, our 327 % outperformance over the average asian nation and 2.45x the performance of Vietnam, the best performer, our MODEL PORTFOLIO has demonstrated its worth.
The true lessons of the above numbers is that ACTIVE MANAGEMENT actually outperforms PASSIVE MANAGEMENT over the long term.
If what we see coming in the next two years proves right, then the above sentence will be even more vindicated.
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