5.2.2019 Ernst Grönblom

HCP Focus Annual Review

Investing in a few superstar companies provides the highest returns
We analysed Facebook’s sustainability shortcomings and decided to keep investing

HCP Focus ended last year as the best Finnish actively managed stock fund.

As you know, the year 2018 was challenging for all investors. Almost all asset classes including stocks, bonds, real estate, and commodities made losses.

Finnish stocks (the OMX Helsinki Cap return index) returned -4.3% on average. Global stocks (the MSCI ACWI IMI index) returned -5.8% on average.

Out of all 500+ stock funds marketed in Finland only 34 managed to end the year with a positive return. I can to my great delight inform you that HCP Focus was one them. In 2018, the fund returned +1.7%.

Removed from context, the return percentage is naturally not flattering, but considering the circumstances and compared with competitors, the result was at least satisfactory. Additionally, many investors have told me that just avoiding losses feels like a relief.

The Return in the Long Term

HCP Focus has gained well in the long term as well. Over five years, HCP Focus returned slightly less than 14% annually on average, which makes the entire period’s total return approximately 90%. Let it be mentioned for the sake of comparison that in the same period Finnish stocks (the OMX Helsinki Cap return index) returned only about 57%.

If you are interested to find out how Focus has performed in comparison with its competitors, see the attached ranking.

In this list, you can find all stock funds marketed in Finland with at least a five-year track record. The list ranks funds by performance over five years (1.1.2014 – 31.12.2018.)

The list has a total of 461 funds. HCP Focus made it to 9th place. This means that HCP Focus has outperformed 98% of its competitors.

Do you want to buy Finnish?

Another interesting detail: measured by its 5-year return, HCP Focus is the best Finnish active stock fund!

At least in the case that a Finnish stock fund meets both of these criteria:

(1) the fund is owned by a Finnish fund company; and

(2) the fund’s portfolio manager is a Finnish citizen living in Finland

Background: only eight funds have a better five-year return than Focus. Out of these only two were owned by a Finnish fund company (”Danske Invest Rahastoyhtiö Oy”), but one of the funds (”Danske Invest Teknologia Indeksi K”) is a passive fund and another (”Danske Invest Kestävä Arvo Osake K”) is managed by a foreign portfolio-management team.

So if you value active portfolio management and the opportunity to meet your portfolio manager face to face, and if you also want to buy Finnish, you know where to begin!

Best regards,

Your portfolio manager Ernst

Do not hesitate to contact me, if You have questions or comments.

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If you would like to study the theme further, I am attaching the following link (in Finnish) for the fund report archive of Suomen Sijoitustutkimus Oy. The December’s report has all the same information as the Excel table I’ve attached to this text (and much else.)

(This text is a translation of the Finnish-language HCP Focus Annual Review.)

Investing in a few superstar companies provides the highest returns
We analysed Facebook’s sustainability shortcomings and decided to keep investing

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