Setanta Q4 2021 investment fund newsletters

Setanta Q4 2021 investment fund newsletters

The year just gone was certainly an eventful one. On the economic front, two significant new COVID ‘waves’ Delta and Omicron held back economies from fully realising their potential output in 2021. Ongoing restrictions contributed to significant supply chain bottlenecks. With demand strong and supply constrained, inflation spiked to around 5% in the US and Europe, the highest levels in some time. Although the inflation trajectory is uncertain, the global interest rate cycle is on an upward path.

Stocks were strong across the board, but there were some key takeaways. While “growth” and “value” indices performed similarly, the valuation of what we term “super-premium” companies (high quality, strong and predictable growth) continued to rise and some of them look to us to be in over-priced territory. 

Risk aversion is one of the key pillars of our investment approach. For much of the last 21 months, this has felt like it ran against the prevailing speculative mood in markets. Through this time, we have remained consistent in our approach and were glad to see reward for this in the fourth quarter and the year 2021.

The Setanta fund commentaries discuss, among other subjects, the record level of global M&A activity, the outlook for inflation and the potential for the value style as interest rates rise. We also analyse the principal drivers of fund performance in 2021, and review portfolio activity over the year.