• Willow Oak Advisory

Ubique | August 2020 Update

August saw quite a swing with our gold position, rising up by 9% and then crashing down to -5%, before settling at just under -2% for the month. With our position 13 months old now, and a gain of over 70% in that position since then, pullbacks of such magnitude are inevitable. And with our benchmark for drawdown on this position watermarked at the month opening value, this 14% move from peak to trough didn't trigger any stop losses.

The million dollar question now is, will we see another bullish rally on gold or has it now peaked! Honestly, I haven't a clue. I could show compelling evidence to support both narratives. What I do know, is that our metronome of an indicator is still in the gold camp, though the strength of it halved in the last month, and as such, we will continue to hold gold.

Our other two strategies both held some variation of long term bonds, which under delivered in August. With the S&P500 delivering over 8% growth last month, negative growth in bonds will always be the net result. This brought the overall portfolio to -5.01% for the month and 11.14% on the year to date.

The portfolio will be re-balanced for September, with us continuing to hold gold and long term bonds, as well as a short position in platinum. September and October historically are a very volatile months, and in a Presidential election year, this just amplifies the results. That being said, the upcoming November to May run during an election is normally very very bullish. Of course, that doesn't mean it will repeat itself this time around...

We are close to making two last major adjustments to our Seasonal Sector Rotation Strategy, which should see the overall returns boosted by a few percent and reduce out drawdown by quite some margin. We are exploring a more stable version where we only change every few months rather than each and every month. We are hoping to have this in place before October. All details will be on the website, podcast and in this mailer as and when they develop.

One other major development is how we are going to structure the fee's for the fund. We are very adverse to the traditional 2/20 model most funds have in place, as they rarely favour the investor and pays the fund even when it under-performs. To that end, we are exploring an alternative way which puts the client in the driving seat. This isn't set in stone just yet, but this is where we are up to:

- No annual management fees

- No entry fees

- First 9% each year goes entirely to the client

- The next 2% goes to us

- Between 11-20% return is split 70/30

- Between 20-30% return is split 50/50

- 30%> return is split 30/70

Doing it this way creates a unique dynamic. Firstly, the client gets the first 9% meaning we don't make anything until the annual average return of the S&P500/SPY has been made for the client. Secondly, it incentives us to outperform. The more alpha we generate, the more we get. Having applied this model to the historical results, clients are still massively outperforming the market after fees, which is important to us, if we want to attract AUM and keep it!

For more in depth analysis, everything is on the website for inspection (

Until next time, stay safe and swing easy.

63/66 Hatton Garden

Fifth Floor, Suite 23



United Kingdom

+44 (0) 203 633 6961

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