Executive Summary
The discrepancy between the straggling COVID-19 economy and equity markets widened further during the last month of the year. Equity markets ended 2020 with valuations among the top percentages of their historical ranges while the global economy struggled with one of its worst contractions since the end of World War II. Government unleashing of unprecedented fiscal and monetary stimulus combined with expectations for additional stimulus in the US helped support the continued strong recovery in equity prices, with positive COVID-19 vaccine news serving as booster fuel for the rally. Meanwhile, many regions continue to struggle with virus spread, leading to the re-imposition of strict lockdowns across much of Europe, parts of the US, and elsewhere. This will likely have a negative impact on 4Q 2020 and 1Q 2021 economic growth and corporate earnings. Thus, we have turned cautious on equity markets and are responding with an application of defensive tactics and an increased focus on capital protection. The Technology of the Future Fund had a +3.22% return in December, slightly underperforming the benchmark MSCI World Index (USD), which had a return of +4.14%. The fund delivered a +38.07% return in 2020, significantly outperforming the benchmark MSCI World Index (USD), which had a return of +14.06%.