Financial Planning Portfolio Performance March 2021

Financial Planning Portfolio Performance March 2021

Acumen Portfolio Performance Q1 2021

Commentary on Portfolio Performance – Quarter 1 2021

The first three months of the year again saw all portfolios finish comfortably in positive territory. Although the bullish sentiment in the market continued the period was not without volatility however effective diversification within the Acumen portfolios saw a smoother ride for investors.

Equities rose on an increased vaccine rollout, agreement of a major stimulus plan in the US, a series of strong economic indicators in the US and Europe and upward revision of global economic growth forecasts by several leading agencies.

Coupled with the Biden stimulus package, the most significant change in financial markets has been the expectations in the US that interest rates will increase earlier than the US Federal Reserve would have investors believe. This gave rise to a strengthening US dollar, a weakening Euro, increased demand for industrial commodities and reduced demand for “safe havens”.

Markets in Quarter 1 2021


The start of 2021 saw the continued rotation into “cyclical” stocks such as financials and energy stocks and out of the technology sector which is more sensitive to interest rate rises out into the future

The Biden stimulus package coupled with a very effective ramping up of the vaccine programme in the US has given great confidence to the US equity market and has in turn led to a rise in share prices globally. In local terms the main US indices all gained. The Dow is up 8% for the year, the S&P 500 is higher by 6%, with the Nasdaq picking up 3%.

There have been significant upgrades to global economic forecasts from many leading analysts for 2021 and into 2022. The OECD says the world economy is now projected to expand by 5.6% in 2021, up from 4.2% rate anticipated in December. It has also upped its projected growth rate for 2022 to 4% from 3.7%.

Eurozone equities are up 8% and Japanese equities are up 9%, despite the slower vaccination programmes. Both have been helped by a strong rebound in global goods demand.

Emerging markets have had a difficult period. In China property lending was curtailed and the Chinese IT sector comes increasingly under US scrutiny. Recent virus outbreaks are putting pressure on the Brazilian and Indian markets. The latter country has a younger age profile which may soften the impact until the vaccine programme takes effect.


The risk of a return of inflation that could materialise in mid-2021 is fuelling a trend of rising yields (falling bond values) in the US, particularly the longer maturities and is impacting Government bond valuations. The Fed has committed to keep borrowing costs in check for the foreseeable future. The trend of rising yields is more muted in the Eurozone. Corporate bonds fell but were cushioned by expectations of economic recovery and continued Government support.


The uncertainty regarding the outlook for Irish Commercial Property continues. Valuations have been hard to gauge.

Rent collection has become an issue for retail in 2021. Retail parks fared better than prime Grafton Street/Henry Street shops. Take up of new office space has been slow. There is some subletting amongst large committed tenants. Dublin still a favourite destination for finance firms moving into the EU post Brexit (EY).

The Industrial property sector continues to hold value and is being transacted well.


Gold struggled amid rising government bond yields and a rising US dollar, but it remains an effective diversifier in smoothing returns in mixed asset portfolios. Oil and copper have continued to forge ahead. Oil was assisted by the Suez Canal blockage at the end of March.