Sunday, January 1, 2017

Portfolio performance 2009-2016

Let's review how our portfolio fared in the year 2016 against passive index investing.

Our "benchmark investment" is an imaginary passive ETF that closely tracks the performance of MSCI all country world (ACWI) index in euros.

First half of 2016 was absolute horror show (vs. index and in absolute terms even more so) and we were behind index most of the year - until December came along and several of our positions gained manyfold compared to index so we ended up beating our benchmark in the past year.

The result for the year 2016 was our portfolio 14,9% vs. benchmark investment 10%.

Note: "Difference" column uses exact values as input rather than figures rounded to 1 decimal that are displayed.

The "beat" is mostly due to our positions in U.S that fared very well.

Euro continued it's decline agains USD from 1,086 to 1,054, which created small headwind for us as our portfolio is significantly more titled to Europe than the ACWI index.

Cumulative gains of our portfolio (blue line) vs. benchmark investment (red line). 31.12.2008 = 100.

It's continues to be amazing how closely we overall track the benchmark given that our portfolio has very different region & sector allocations compared to ACWI index.

While I would naturally like to beat the benchmark we have set for ourselves, the performance so far isn't that bad given that over 70% of the actively managed investments funds fail keep up long term (10 years) with their benchmark index (according to Morningstar - as I wrote last year for 2015 review).

To be fair, I don't track our performance purely against the index (below), so we are trailing cumulatively the pure index to some degree. If you want to know more about our "bechmark investment" against we track and the way above comparisons are calculated, please read the latter part of portfolio performance update from 2014.

 Our benchmark index 2009-2016 (based on data from MSCI All Country World Index; Net; Euros)

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