We have ended the involvement with our two share bundles at EasyEquities – including the Biznews US Exponential portfolio which has delivered a superb 24%pa annualised in US dollars since its launch in November 2017. The Biznews SA Champions bundle, launched in January 2017, lost 3%, a little worse than the JSE All Share Index which was up 2% in those two and a half years. In today’s webinar, I answered a lot of questions about individual stocks, and unpacked the reasons why we have ended the relationship with the innovative low cost stockbroker. Those reasons are repeated in the summary below. – Alec Hogg
Since the Biznews bundles at EasyEquities were kicked off in 2017, hundreds of people who followed us into them did pretty well on the offshore one, but unfortunately the SA Champions idea didn’t catch fire in the same way.
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At the official ending of our involvement today, that $100,000 invested in the US Exponential bundle in November 2017 has grown to $138,641. The R100,000 with which the SA Champions bundle began in January 2017 is worth R97,016.
The offshore portfolio owes its success to an incredible 89% share price growth generated by Amazon, the biggest and core holding in the portfolio; and to a lesser extent the surprise package Microsoft, one of five “wild card” stock picks, which rose 74%.
Both Apple and recent addition Adobe Systems also did better than the overall US market and with the sole loser – AliBaba – trimming recent losses, the portfolio ended up outperforming the S&P Index by a juicy 20 percentage points.
On the other side, like the JSE itself the SA Champions portfolio had a rocky run, underperforming the soggy overall market by 5%. On the bright side, it could have been a lot worse. Timeous offloading of Blue Label, Brait and MediClinic saved us some big losses.
We weren’t as fortunate with Steinhoff, where 6% had been invested in the now collapsed company. Again, it could have been worse, with our Steinhoff shares sold soon after the scandal hit, at R6, rather than the current R1.30.
On the other hand, the SA Champions bundle’s two cornerstone stocks did well – inclusive of the MultiChoice unbundling, our favourite stock Naspers delivered a 35% return, while rapidly globalising Discovery gave us 26%.
Of the five “wild card” stock picks, FirstRand’s 26% gain was wiped out by a loss-making Australian contract at WBHO and a disappointing performance by Brian Joffe’s Long4Life.
So why are we ending our association with the bundles?
I had no idea when they were created that the bundles would attract so much interest. They were intended to be a way in which Biznews Premium members and the odd EasyEquities client could have a bit of fun by replicating my own investments.
With some good returns generated, especially in the offshore bundle, members of our community literally invested millions into the bundles and some were now asking their financial advisors to move sizeable sums away from other alternatives.
We realised how serious things were becoming when a number of the advisors started requesting official “Fact Sheets” so they could compare the Biznews bundles with the unit trusts and other investment packages provided by asset management companies.
At this point, reality dawned that with so many millions now invested by community members, the project had lost its fun element and was now becoming a serious operation. I have no intention of becoming a professional money manager and decided that with Biznews’s growth sucking up all my spare time and more – it was time to end our involvement.
On a broader scale, in the US bundle it’s also nice to be bowing out after such a super run. It’s always good to sell at a time when you get to actually bank profits – markets are fickle beasts and expecting our portfolio to continue growing at 24% annualised is unrealistic.
Investors in the bundles can either liquidate and invest in their own selections; leave the money in the bundles where the Easy Equities team of professional money managers will now manage them; or sell part of their holdings and stay with the stocks they like.
From our side, the Biznews Premium investment webinars will continue as before, but focusing exclusively on the Global Share portfolio which we have run for the past five years with Standard Bank’s Webtrader.
This is a “model” portfolio, not an actual bundle into which investors can easily invest. I’m comfortable continuing with this as it is very clearly just a guide to the stocks I like; the decision on whether or not to invest, and how much to allocate, remains very much the preserve of each investor.
