//17.24% Return for the last 12 Months

17.24% Return for the last 12 Months

I was pumped! The blue ink from my favourite pen permanently marked the page with my messy signature.

It was done. Signed! Sealed! The deal completed and all that was left to do was deliver the contract and the first of the Calnan Flack Model Share Portfolios would be live! Calnan Flack had joined the big game as Money Managers.

Ian and I had been planning these portfolios for a long time. We meticulously plan everything, and we had put an enormous amount of planning into these portfolios. Investing is 90% preparation. I guess that’s why they call it “Financial PLANNING”.

Fast forward 12 months…

We gain the opportunity to critically review our public record. It’s something that we wanted to be able to do for a long time but until now ASIC has not allowed us. We believe in transparency and now we have a track record for all to see.

So how have we performed?

A Ripping 17.24% over the last 12 months! This performance figure is OVER DOUBLE the ASX 200 Accumulation Index for the same period.

Below is a chart of our performance for the last 12 months compared to our benchmarks.

  • Calnan Flack Australian Share Fund: 17.24%!
  • ASX 200 Accumulation Index: 8.07%
  • MorningStar Multi-Sector Growth Market Index: 6.24%

Our portfolios are humming along. Some might say we are on fire!

We are super proud of our achievements at Calnan Flack – Outperformance of 9.17% is impressive by anyone’s account! And this goes some way to displaying the MASSIVE ADVANTAGE we believe we have due to our understanding and ability to invest with the cycle.

Our other massive advantage is the Investment Team supporting us. Dr Robert Vagg and his research and market acumen along with analysts Elizabeth Flack and Alan Calnan provide us with daily scrutiny of the market. We are also indebted to Katherine Burns and Kym Peters. We would not have been able to make it happen without their Financial Services wisdom.

Recently Phillip Anderson from Cycles, Trends and Forecasts has also joined the Investment Team. His investing, trading and cycle experience makes him an invaluable addition to the team.

Our Australian Share Fund is an opportunistic fund, seeking to exploit opportunities that we as the Investment Manager see in both our specific stock selection (mainly within the Top 100 Australian Shares) but also the way in which we weight our portfolio to either cash or shares depending on the specific cyclical market conditions.

See most Investment Managers are really just Index Managers. They hold investment portfolios that very closely replicate the index that they are benchmarked against.

We DON’T do this.

We believe we are able to capitalise on the cyclical nature of investment markets by investing at times we think the market itself displays value and moving into cash when we believe the share market is overvalued. We select stocks that we believe potentially offer a risk reward advantage.

ASIC ensures that we warn all investors and spectators that “past returns are NO guarantee of future returns” – which we completely agree with. However, we believe in letting our winning shares run and NOT arbitrarily reweighting them back to the index ensuring that you buy more of your losses and sell your winners.

I always remember my Mentor and Market Wizard Robert Krausz when he first explained this concept to me.

I’d been staying with Robert in his spectacular Fort Lauderdale home. We were upstairs overlooking the amazing everglades. (Robert’s wife Jeanne Long, herself a Market Great used to look the other way out over their beautiful view of the North Atlantic Ocean as she traded).

Robert was this big guy, who used to get very animated and it was here that he said to me in his thickest British/South African accent:

“My boy, tell me? If you had two employees. One was very good and provided excellent customer service resulting in more sales, hence greater profits. The other lazy, rude and sold nothing.

If you had to fire one, who would sack?

The hard-working employee who sold the most.

Or the lazy one, who sold nothing?

EEEEXACTLLLY!

You sack the BUM!

So why the hell would you sell your winning positions? You sell your loses – AND FAST!

YOU SACK THAT BUM!”

This is something that is at core of our investing philosophy at Calnan Flack.

Will we massively outperform the benchmarks each year?

Time will tell, however the last year certainly wasn’t an easy year on the markets.

The banks are currently under the hammer at the Royal Commission about their conduct. See for the banks, the money management business is all about “Capital Preservation” that is protecting as much of the assets they have under management as they can.

The banks get paid on the amount of assets they control. The greater the assets the more they make. So the last thing they want is withdrawals or as it’s called in the industry, “leakage” of funds. Their focus is to not have redemptions. They want you to keep your money invested with them! There is no focus on trying to outperform the market!

Believe it or not, this actually scares them.

If you think about it; to outperform the market you need to do something that the rest of the market is not doing. To deviate from your benchmark, or index.  And this means taking on some extra risk. The risk that if these Institutional Managers get it wrong, they will underperform the market.

Underperformance is the death of a Fund Manager. Underperformance leads to leakage! So, the other Money Managers would rather mimic the index and keep your funds under their management.

This is why we smashed the index!

Below is a list of the ASX Top 20 Stocks. Out of this list our Australian Share Fund currently holds 3!

Code

CompanyWeight(%)
AMPAMP Limited1.27
ANZANZ Banking Group8.35
BHPBHP Billiton Limited10.67
BXBBrambles Limited1.69
CBACommonwealth Bank13.57
CSLCSL Limited8.27
IAGInsurance Australia2.01
MQGMacquarie Group Limited3.97
NABNational Aust. Bank8.46
RIORIO Tinto Limited3.54
SCGScentre Group2.3
S32SOUTH32 Limited2.06
SUNSuncorp Group Limited1.95
TLSTelstra Corporation4.06
TCLTransurban Group2.77
WESWesfarmers Limited5.33
WFDWestfield Corp2.05
WBCWestpac Banking Corp10.52
WPLWoodside Petroleum3.24
WOWWoolworths3.93

This is markedly different from almost every other Australian Share Manager with a preference like us to invest in the BIG end of town.

Just because they are BIG, doesn’t make them GOOD!

So, if you want AVERAGE performance, then invest with the averages. This will ENSURE that your portfolio WILL LOSE VALUE at EVERY MARKET DECLINE!

But if you want to give yourself a chance to take advantage of the cycle, then you need to Think differently and Act differently.

We can’t wait for the next 12 months….. An opportunity to repeat 17.24% -v- 8.07%

For more information about the Calnan Flack Australian Share Fund click here:

Calnan Flack sma’s

IMPORTANT NOTICE

Disclaimer: Any opinions or recommendations expressed here do not purport to Financial Advice but rather should be considered General Advice and does not take into account your personal needs and objectives or your financial circumstances. You should therefore consider these matters yourself before deciding whether the advice is appropriate to you and whether you should act upon it. Should Financial Advice be sought, we suggest you seek such advice from an appropriately qualified advisor. Any yields, rental income, tax rates, interest rates, depreciation rates, inflation rates Dividends per Share (DPS) and Earning Per Share (EPS) etc shown are estimates only and should not be used as a guide to future performance. Past performance is not necessarily a guide to future performance and should not be relied upon for this purpose. Authorised Representative of PGW Financial Services Pty Ltd – AFSL 384713
By | 2018-05-07T11:47:59+00:00 May 5th, 2018|Cycles|1 Comment

One Comment

  1. Keith Mundy May 5, 2018 at 5:41 pm

    Ian & Jeremy, bring it on!

Leave A Comment