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20 Aug 2021 - Hedge Clippings | 20 August 2021
By: Australian Fund Monitors


Hedge Clippings | Friday, 20 August 2021


'All the world's a stage, and all the men and women merely players...'

Hedge Clippings is not quite sure what made the above quote from Shakespeare's 'As You Like It' spring to mind, except perhaps the concept that life moves on, as in 'the acts being seven ages'.
Right now, in the middle of COVID and the seemingly never ending lockdown (maybe, but who knows, we might be progressing, albeit slowly), it seems the days and weeks are becoming very similar, and not moving on at all. The daily update from various premiers seems much like the days before, except for the actual numbers which seem to increase, including - encouragingly or in spite of - the number or percentage of vaccinations administered.

Fund managers meanwhile are continuing to make excellent returns on behalf of their investors, supported of course by equity markets both here and overseas.

To the end of July the ASX200 total return index gained over 28%, and the S&P500 over 36%, with the small and mid-cap sector equity based funds significantly outperforming both the market and their large-cap peers:

ASX200 Total Return      Large Cap Funds       Small/Mid Cap Funds
          +28%                              +29%                            +41%

S&P500 Total Return      Large Cap Funds       Small/Mid Cap Funds
          +36%                              +32%                            +40%

This may seem a little glib and trite coming from a corner of the financial services sector which has to date been inconvenienced, but remains largely financially unaffected by COVID. Life may be tedious, but thanks to technology, Zoom, government support, deal flow and low interest rates, tedium and lockdowns are merely a personal inconvenience.

Not so elsewhere, or in other sectors, be they geographic or industry. Discretionary retail, food and beverage (although we're doing our best to support the local bottle shop), entertainment and travel will, assuming they survive until vaccinations take over, simply struggle, as will their employees and suppliers. At what stage that economic activity (or lack of it) flows through to the broader economy remains to be seen.

In the meantime as life meanders on, our thoughts go out to those in Afghanistan for whom 'lock-down' takes on a whole different meaning. We'd all do well to consider that, before complaining of masks, lock-downs, or the removal of so called civil liberties.

The Bard would have put it better, but that's the best we can do.

And on that note have a safe, and happy weekend.

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