2020 Portfolio Review

02 Jan 2021 . Category: Portfolio


Performance this year was better than last year. I achieved an overall return of +40%, ahead of both the RPI+3% (+4%), and the FTSEAS-TR (-9%) benchmarks.

I managed to avoid losing money in the February dip, selling holdings before it. It was apparent there was trouble ahead in January when twitter was full of China lockdown talk. The slow market reaction was hard to explain (Efficient Market?), I read one interesting theory that the trading algos didn’t have a global pandemic in their training datasets and so didn’t know it should go down. Anyway, having nailed the dip, I then completely missed the bounce - Doh!

Multi Asset Portfolio

The Multi Asset portfolio returned +8%, avoiding the bulk of the Mar/Feb sell-off and finishing ahead of both RPI+3% and FTSEAS-TR with less volatility.

I have been trying to time my entry here, but now questioning my rationale given that the funds are ~60% bonds/cash. I have deffo lost money by not just investing and forgetting about it.

Growth Portfolio

The Growth portfolio returned +55% which was well ahead of both it’s benchmarks, though more volatile than I’d like. This return was largely due to my market timing of the entry point after years waiting!, I never really believed in the can’t time the market thing - Except now for multi asset funds.

Holdings in the Growth Portfolio were increased significantly during the year, influenced by the increase in government money printing and my uneasiness in holding a high cash weighting. Most purchases were commodity related, which presented the best risk-reward following the March sell-off. In truth, I missed the equities bounce, but was nimble enough to position in commodities, which are historically cheap.

Precious Metals:
The Currency Debasement theme performed well this year. Following the collapse in markets around Feb/Mar time, I added to my holdings when silver was around $14/15-ish. The price then doubled and I thought it prudent to take some profit after such a quick gain - but like a good pirate, I still retain a large weighting. I’ve also purchased a mid sized gold royalty company which should do well in a precious metals bull market. I plan to keep an overall weighting below that of energy as the oil:gold ratio is in oil’s favour.

Oil & Gas:
With the economy shutting down, many oil companies prices fell significantly to multi decade lows. In my view, this has presented one of the (apparently many) opportunities of a lifetime as I’m expecting Energy Inflation. I invested in a Canadian royalty and a large cap integrated oil company. In an inflationary environment, royalty companies will continue to receive their ‘rent’ without having to drill expensive holes. The other investment was in Suncor Energy; the main attraction being that it is low cost producer with ~30year reserve life (Compared to other oil majors with circa ~10yrs). In an inflationary environment, Suncor won’t be forced to pay ever increasing costs to expand their reserves, they’ll just continue to dig it out the ground and shove it on the back of a truck, or something like that. They should benefit fully from price increases. That’s the theory.

Uranium Supply / Demand:
As part of the Electricity Demand theme, my basket was reduced to only 2 companies. Energy Fuels was sold as it diluted ~30% despite previously stating it had sufficient cash. Investigation showed significant dilution in previous years, so I took the opportunity to sell on a bounce and rebalanced into general commodities for a more balanced portfolio. It since doubled, though I still believe my decision was correct. In truth, I was beginning to view the uranium sector as pretty un-investable, with most companies likely to dilute significantly but the recovery looks like it may be under way with my largest holding Nexgen Energy up by 80%.

Base Metal Royalties:
I started adding holdings to the Commodity Cycle theme, buying into 2 base metal Royalty companies (and selling CNY prior to Covid dip). One of the companies provides exposure to copper, potash and Iron ore and the other coal, copper, and potentially battery metals. Royalty companies should offer a low risk way to gain exposure to the secular commodity theme.

Other Stuff:
An investment was made into a Global Macro / Relative Value hedge feeder fund. ETF people should look away now, as the fees are eye-watering. The rationale here is it is one of the few sources of non correlated returns available to non institutional investors (remember the importance of non correlating assets?). I’m using it as a sort of bond substitute, bond holdings were decreased as they offer little upside and potentially a lot of downside. Even after the fees, the performance of the fund is good - At least that’s what I’m telling myself as I’m helping to make someone else rich.

I bought shares in a BATS trading around 9 year lows due to ESG concerns. These should be defensive and provide a good dividend. It is in the best performing sector of the last 100 years - I don’t see that changing as they are an asset light, high return business selling an addictive product. Additionally, they have high barriers to entry as the advertising ban means no new competitors or need to spend on advertising. Their interests are highly aligned with governments (tax generator).

Reviewing the above - I appear to be investing in a general anti-ESG theme, which has left some companies seriously undervalued as investors are herded into ESG friendly funds. I don’t think this is an accident, a sort of bait and switch thingy awaits. Another possibility is that cash could continue flowing out and I keep collecting large sustainable dividends, either is fine by me.

The Great Crypto Experiment of 2020

Alternatively, the Mediocre-at-Best Crypto Experiment. Anyway, long storey short: I got bored (danger!) and wrote some scripts to generate crypto addresses, bought ~800 quids worth of XRP, transferred it to my address, it worked!, it trebled, SEC launched legal case against Ripple, it halved and I sold. I should have invested in bitcoin instead.

The SEC consider XRP as a security and there is the real possibility the exchanges will de-list it. I do wonder about the viability of other cryptos, if the government can crash them overnight. I know about defi, this ones different, etc, but the government could make things really tough if they wanted to (see this on that topic). Think that’s probably the end of my crypto adventures.*

*Disclaimer: I may or may not own 163 quids worth of bitcoin which henceforth (in the event of it’s existence) will be known as the Bitcoin Retirement Fund


Although the returns this year have been very good, I’m annoyed at myself for not investing more in the Feb/Mar drawdown. Being too conservative meant that only a small portion of overall worth befitted form the large gains. I was expecting further significant falls and didn’t foresee the large government stimulus, though don’t think the magnitude was predictable :

“Took unprecedented Fed BS ($4Trillion or 2x 2008) + buying corp debt + repo in response to a -30% drawdown to prevent financial system meltdown.”

And now, an important public service announcement:

“To everyone who got into trading stocks this year, I have a little hard truth for you: You’re not actually that god at it. You just got caught a wild bull market. Take some money off the table.”

I’m not sure if it was a bull market or a fed induced asset inflation. I do expect a pull back, though not enough to take any money off the table - End of year was a bit melt up-ey.

In the Growth Portfolio, I’m still looking to deploy money into an Emerging Market Consumer theme and also a value orientated special situations fund, as you do. I know, it’s a growth portfolio. They don’t look like they’re going to get any cheaper, so I may average into these over the coming year - possibly only at a half weighting.

With the governments need for money, it’s likely CGT will increase and so tax risk needs to be considered when constructing the portfolio. The only way I see of mitigating against this risk is to divert investments into broad based funds where there won’t ever be a need to sell and incur CGT. I’ll need to take the hit on some of the asymmetric themes in the Growth portfolio, though even there I’ve a 5/10year horizon and might even lose money.

In terms of 2021 predictions, nae clue. People are questioning whether, following the stimulus, the business cycle still exists? Stocks could easily up 40% or down 40%, failure to predict market moves this year has re-enforced the fact that I’ve no short term edge, hopefully my longer term investment theses hold up. I’m thinking it may be risky holding cash going into 2022 & probably 2021 too, possibly get another chance to position? On that topic, this guy “knows his shit” ™ :

Current game plan

  • Focus on not doing anything too stupid
  • Don’t pay too much
  • Don’t concentrate holdings
  • Don’t feel forced to quickly invest as markets shoot higher.

I’m already failing on at least one of those. Most investments will likely now be in the Multi Asset category as I’ve less chance of screwing that up.


Iain Benson is a real person and not a grassy plant viking. He lives in Northern Spain. In his spare time, Iain likes tinkering with his Raspberry Pi, going for long walks and drinking wine. Preferably all at the same time.