Right time for Global Masters Fund – 2020

Reflecting on 2020

The 2020 calendar year is coming to a close and it will be impossible to write about the year without mentioning COVID-19 and the impact that it has had across the globe. Internationally the virus continues to spread and cause concern for health authorities while in Australia the measures taken appear to have controlled infection. This has allowed borders to open and for the majority of Australians life has returned to a version of normal.

The Impact of COVID-19

From a top-down perspective, the statistics illustrate the impact of the Coronavirus. The Australian economy entered recession in the March quarter for the first time in 28 years. In the June quarter, the economy contracted by 7 per cent – the biggest fall in activity since the end of World War II, with the cash rate currently standing at a record low of 0.1 per cent. The Australian dollar is near US74.3 cents, unemployment stands at 7.0 per cent, and annual inflation is 0.7 per cent.

Economic Statistics and Challenges

At the height of the pandemic in Australia, businesses needed to adapt to survive – gin distilleries became hand sanitiser producers, event staging manufacturers built flat-pack office desks and nearly every service organisation implemented a work from home program. Five years’ worth of technology adoption occurred in weeks as businesses worked out new ways of connecting staff and customers. We created a channel for #DadJokes on Slack and attended board meetings with our pets. However, something was missing: the face-to-face interaction, mentoring and interaction that occurs within the office environment.

Business Adaptations During the Pandemic

For business leaders, these items have become the next challenge for those who need to engage with their teams and provide purpose and a sense of community when normal social interactions were not possible. Luckily, for many people it was also a time to slow down, to spend time in the family unit and to reflect on what really matters.

The Shift in Workplace Dynamics

At Global Masters Fund Limited, 2020 has been busy as usual in many ways. The major investment in Berkshire Hathaway remains unchanged, although the value of this investment fluctuated significantly throughout the year. Overall, from the end of December 2019 until the end of November 2020, the value of Berkshire Hathaway declined by 3.4% in AUD terms. The actively managed UK portfolio performed exceptionally well with performance in GBP terms of 6.0% versus the FTSE which declined by 16.9% over the same period. Despite this performance, at the end of the period December 2019 to the end of November 2020, our Net Tangible Assets declined by 2.9% (due to the movement in Berkshire Hathaway) compared to the ASX All Ordinaries which declined by 0.9%.

Global Masters Fund Limited: Year in Review

2020 has been an unprecedented year; we sincerely hope 2021 provides a more stable environment for communities at home and abroad.

Happy holidays and best wishes to all, Merry Christmas.