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How the 2019 Bargain Shares portfolio beat the market

Simon Thompson's 2019 Bargain Shares portfolio smashed the market. Our ace small-cap stockpicking expert explains just how this was achieved, and why there is still material valuation upside to the portfolio
How the 2019 Bargain Shares portfolio beat the market

My 2019 Bargain Shares portfolio put in a vintage performance, returning 33.1 per cent in the past 12 months, or 19.7 per cent percentage points more than a FTSE All-Share index tracker fund and 26.4 percentage points more than the total return on the FTSE Aim All-Share in the same period.

Moreover, I recommended exiting three holdings: TMT Investments (TMT), a venture capital company that has a significant number of Silicon Valley investments in its portfolio; Futura Medical (FUM), a pharmaceutical company that is developing innovative products based on its transdermal Dermasys® drug delivery technology; and Mercia Asset Management (MERC), an asset management and investment company focused on UK technology businesses with high growth potential. What this means is that, including dividends banked, you will have turned 48 per cent of your invested capital into cash and still own seven holdings that are worth between them 85 per cent of your portfolio’s starting capital. This not only de-risks the portfolio, but means that the risk-adjusted return is even more impressive given the high cash holdings.

 

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