Say it as it is

For many managers, writing their February market update will have proved particularly trying.  A number will have lost money and while some will have traded around the storm, others will have stuck to their guns. 

Let’s face it, what would have been written pre-22 February is very different to what needed to be written afterwards.

All fund comments should, if good practice prevails, take into account the main aspects of the macro environment and the manager’s thinking around this. Never avoid the elephant in the room. 

These are the views that investors appreciate and add value: how the manager views the market, possibly where they see it evolving and how they are positioning the portfolio.  It is this rationale why the investor possibly invested in the first place. 

Investors are fully aware that we are in a twitchy risk-off environment, so do not need reminding about the specifics of global equity benchmarks, for if you go down this route it starts to become a beta story. 

Instead, investors want to hear what’s been done, how it impacts the portfolio and what changes have been made. This is what makes that manager standout. It is where the value lies; it also makes an investor feel smarter and more confident and comfortable in what the manager is doing. 

Also be straight, if something did not work, then say it and say why. 

We are in the midst of a very uncertain world, both geopolitically in the Ukraine/ Russia and economically, with Fed and ECB tightening imminent and the pressures of fast rising commodity prices. What is the manager’s view on this and how are they structuring the portfolio to take this into account? Personally, I would like to know.