Transforming personal finance since 2011

#37 — 2018 Performance Review

January 18th, 2019

By Andrew Craig

Reading time: ~ 1 minute

I wanted to write a quick update today to highlight how our fund did versus many of the other main financial markets in 2018 now that all the results are in.

From the 1st of January to the 31st of December 2018, our fund was down 6.36% (it is now minus 5.1% since launch having recovered just over 1% so far in January).

Below is a list of the performance of a wide cross section of the world’s major financial markets in 2018:

Source: Plain English Finance

We can see that our trend following methodology has provided downside protection in a very negative year. It is also designed to respond accordingly when an uptrend reasserts itself.

Regular readers will remember why this downside protection is so important: The break-even fallacy.

  • Having fallen 6.36% in 2018, our fund needed 6.79% to get back to break-even / square one. 
  • The FTSE 100, having fallen 12.3%, needs 14.02% to recover.
  • The DAX, after a 17.97% fall, needs to make 21.9%...
  • …and Bitcoin will need to return a whopping 263.9% to get you back to where it was in January 2018.

This is the impact of the break-even fallacy and why the tortoise so often beats the hare over a lifetime of investing.

Trading Update

Those of you who signed up to receive our monthly trading updates a few weeks ago will get an email with the specific trades we made at the beginning of the month, but I wanted to explicitly note in this email that the fund now has 16 out of 24 silos in cash – i.e. is reasonably defensively positioned.

For example: When we ran our monthly signals to inform our January trades, we sold out of the S&P 500, energy commodities, US property and global infrastructure and bought into both Euro and Sterling corporate bonds. We no longer hold any developed market equities.

As a reminder, you can see a ‘traffic light’ depiction of precisely how the fund is positioned at any given time in the Funds section of our website – just scroll down a little from the top.

Important Disclaimer

Plain English Finance Limited has used all reasonable efforts to ensure the accuracy of the information contained in this communication at the date of publication.

An English language prospectus for the VT PEF Global Multi-Asset Fund is available on request and via

Investors should read this document in conjunction with the fund's Key Investor Information Document and the relevant application form before purchasing shares in the fund. Full details of each of the risks and aims for the fund can be found in the Key Investor Information Document which are available from us or at

Past performance is not a reliable indicator of future performance. The value of investments and any income from them may fall as well as rise, the return may increase or decrease as a result of currency fluctuations, and you may not get back the amount of your original investment.

Plain English Finance Ltd. does not make any recommendations regarding the suitability of this product for you and the information provided should not be considered as investment or other advice or a recommendation to buy, sell or hold a particular investment. If you are in any doubt about the information in this email or our website please consult your financial or other professional adviser.