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Tightening up the Fantasy Sipp

Phil's been fine-tuning his fantasy portfolios and adjusting his outlook for several businesses with underlying quality.
June 5, 2020

I’ve been doing a bit of tinkering with the Fantasy Sipp portfolio which is now making money year to date, although lags an S&P 500 ETF and many leading quality funds so far in 2020.

The UK Quality Shares portfolio has staged something of a recovery as optimism about the opening up of economies has seen many battered shares bounce back. The portfolio is down 7.6 per cent year to date, compared with a fall of 15.8 per cent in the FTSE All Share index, which is a bit better than a few weeks ago but still a significant loss.

The portfolio is an experiment on quality growth investing in the UK market. This is a difficult task given the scarcity of high quality businesses available at reasonable valuations but I will also admit that I have made some mistakes in stock selection as the lack of resilience of businesses has been exposed by the lockdown.

I do believe that many of the problems the real economy faces will improve sooner or later but I retain my view that things are unlikely to get back to where they were any time soon. This is not just down to issues such as social distancing and the difficulties it presents many businesses with, but is based on a view that the underlying health of economies - and consumers in particular - was weak before the coronavirus came about.

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