Fisher investments is a well-known wealth management firm founded by Ken Fisher in 1979. With over $197 billion assets under management, it has established a solid reputation for navigating volatile markets and generating robust returns. However, 2020 presented exceptional challenges with the COVID-19 pandemic impacting global markets. This article reviews Fisher investments’ historical returns in 2020 and examines their investment philosophy and strategies that aim to weather uncertain times. We will analyze key factors behind their performance, including asset allocation, sector bets, risk management and market outlook. The goal is to provide insights into Fisher investments’ resilience and adaptability when confronted by crisis situations like the 2020 downturn.
Fisher investments took a sizable hit in Q1 2020 but rebounded strongly for overall positive returns
Like most equity-oriented strategies, Fisher investments’ portfolios experienced significant declines during the first quarter of 2020 as the coronavirus outbreak triggered a historic market crash. Their Global strategy fell over 19% while US Large Cap Growth dropped around 14%. However, Fisher investments was able to cut losses and even generate gains for clients who stayed invested for the full year. Their Global strategy finished 2020 up over 7% while US Large Cap Growth rose around 28%. This exemplifies Fisher investments’ ability to endure short-term volatility and come out ahead over a full market cycle. Their long-term orientation and willingness to embrace market fluctuations are cornerstones of their investment philosophy.
Dynamic asset allocation and sector rotation helped Fisher navigate uncertainty
Behind Fisher investments’ comeback in 2020 was nimble asset allocation tailored to evolving conditions. As the pandemic took hold, they cut exposure to economically sensitive sectors like financials and energy that were vulnerable to shutdowns. Fisher pivoted into stable defensive areas including healthcare and consumer staples. When markets stabilized and positive vaccine news lifted optimism, Fisher investments rotated back into beaten-down cyclicals and small caps, capitalizing on their resurgence. Such flexible sector positioning captures upside while limiting drawdowns, a key driver of Fisher’s resilience. Their global diversification also helps weather location-specific risks.
Fisher investments’ contrarian approach tunes out short-term noise but retains long-term focus
Staying committed to long-term return potential rather than reacting to short-term gyrations is integral to Fisher investments. This contrarian philosophy lent conviction during the 2020 drawdown, allowing Fisher to opportunistically buy when others panicked. The firm rigorously analyzes fundamentals to determine which pullbacks are sentiment-driven versus justified. This prevents overreacting to temporary fluctuations while still responding prudently when risks warrant. Fisher investments’ methodology, honed over decades, marries data and fundamentals with perspective on human emotions that often distort markets.
Prudent risk controls and tactical hedging mitigate volatility in Fisher’s portfolios
While embracing some interim volatility, Fisher investments employs tailored risk management strategies to cushion portfolios against severe swings. Their investment process considers correlations between securities and trims outlier volatility through diversification. Fisher investments also tactically uses options and derivatives to hedge risk while still benefiting from upside. Their strategic hedging helped protect capital during the initial 2020 plunge before pivoting to capitalize on recovery. Blending conviction to stay invested long-term with prudent risk controls enables Fisher investments to limit portfolio drawdowns.
Looking ahead, Fisher investments sees new bull market taking hold but risks remain
Characteristically non-consensus, Fisher investments turned bullish in mid-2020 even as many remained bearish. This proved prescient and exemplifies their forward-looking assessments. While anticipating solid gains ahead in the new bull market, Fisher investments still sees periodic pullbacks likely as COVID-19 maintains grip in the near-term. However, their fundamental and technical analyses see past volatility giving way to upside as vaccines combat the pandemic and economic revival unfolds. But they caution risks remain until recovery solidifies, warranting moderated positioning and nimble reactions. This outlook aligns with Fisher investments’ signature approach – optimistic but vigilant, embracing opportunities while safeguarding against pitfalls.
Overall, Fisher investments’ resilient performance through 2020’s extreme volatility highlights the merits of their long-term contrarian philosophy, rigorous risk controls, and adaptive sector positioning. Their dynamic strategies aim to generate consistent returns across market cycles, not chase unsustainable runs. By tuning out short-term noise, yet responding prudently when risks emerge, Fisher investments provides a model for navigating markets in uncertain times.