2020 puzzle completed · ΥΓΕΙΑ ΚΑΙ ΥΓΕΙΟΝΟΜΙΚΟ ΣΥΣΤΗΜΑhealth and sanitary...

InvestmentResearch

www.xspotwealth.com

2020 PUZZLE COMPLETED

In this issue:

A throwback on the industries that starred in 2020 - page 3

XSpot Wealth Model Portfolios – 2020 - page 6

Greek Economy: Closing a roller coaster year with a short term consolidation - page 9

Issue_60

December 2020

www.xspotwealth.comXSpot Investment Research Team

Page 02

Issue_60

OUR ANALYSTS

CHRISTOS ALONISTIOTIS

KONSTANTINOS KARLIS

Christos AIonistiotis is a Certi�ed Market AnaIyst from the Cyprus Securities and Exchange Commission (CySec Advanced). He has over 10 years of experience in internationaI currency, equity and bond markets. He often writes for �nanciaI content websites (capitaI.gr) and newspapers, and is a reguIar commentator on major internationaI economic deveIopments in teIevision broadcasting.

Konstantinos KarIis hoIds the "C" type certi�cate for PortfoIio Management from the HeIIenic CapitaI Market Commission and the "Advanced" certi�cate from CySec. He commenced his career in the Iate 80's as a credit anaIyst and has more than 25 years hands on experience as senior portfoIio manager and equity anaIyst for various domes-tic and internationaI investment management companies as weII as brokerage �rms.

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One of the �rst biggest changes that has taken place during the pandemic is the e�ective collaboration of technology and medicine with the results being extremely promising for the future. The procedures followed for the development of the vaccine have opened new horizons in medical science and according to statements of experts, in the coming years there will be made huge evolutionary steps towards the cure of diseases that plague our planet.

Big pharmaceutical companies have already started to acquire specialized companies while there are many potential pending deals that are in various stages of negotiations and concern speci�c sectors.

Telemedicine sector is expected to have a bright future, growing at an annual rate of approxi-mately 30%, and to this the pandemic has signi�cantly contributed and brought funds of tens of billions to large companies conducting research and development.

2020 PUZZLE COMPLETED

ΥΓΕΙΑ ΚΑΙ ΥΓΕΙΟΝΟΜΙΚΟ ΣΥΣΤΗΜΑHEALTH AND SANITARY SYSTEM

2020 is coming to an end and there is no doubt that it will go down in history as a crucial year for the future of the planet. Whatever happened during 2020 has had a signi�cant economic and social impact. In today’s investment research report, I will make a reference to the changes that took place in 2020, what they may mean for the future and how markets and investment portfolios of XSpot Wealth behaved under the light of them.

WEEKLY REPORT

Christos Alonistiotis

Senior Portfolio Manager

Issue_60


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2020 has been the toughest year since 1987 in terms of investments, due to the unprecedented sharp fall of indexes in a few days’ time. The power of the proper portfolio structure, the proper risk allocation and the huge diversi�cation o�ered by ETFs, proved to be an extremely good choice. More details on XSpot Wealth investment portfolios can be found below.

2020 has been a milestone in the evolution of the global economy. It is no coincidence that there are dozens of reports and many studies by �nancial organizations where 2020 is referred to as the year in which the fourth industrial revolution began.

ECONOMY

The biggest change that has taken place has to do initially with the way we work. Work from home has come to stay as it helps companies save hundreds of billions of �xed costs and these savings can fund new investments or can be used for future shareholder rewards. Saving these resources dramatically changes the balance sheets of companies, something that is not fully visible at the moment.

Another major change that has taken place in the economy is its transformation into an e-economy. The development potential is huge as we are currently seeing only one part of this change. However, leading technology companies that have huge liquidity, are now laying hands on every sector of the economy, transforming it.

An example is Amazon, which has aggressively expanded into the pharmacy and recreation sectors and is now expected to begin reorganizing the courier industry, especially after the problems that emerged during the pandemic.

PORTFOLIO INVESTMENTS

WEEKLY REPORTIssue_60


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Extended losses that stocks recorded in 2020 �rst quarter, gave the opportunity to large portfolios to be massively restructured and get aggressively invested in sectors that will dominate the market in the future. We could say that 2020 simply accelerated this huge change in investment trends of the future.

while the return of the respective industry that invests in green energy companies worldwide, is 117%. This is con�rmed by the �ow of investment capital, which shows that a large part of the out�ows from the S&P 500, has been directed to funds that invest in alternative energy sources.

This trend is expected to be forti�ed even more in the future and it does not only concern the stock market, but also the bond market. Additionally, big fund managers over time will not invest in companies that are not sensitive to the ESG scale.

01 One of the �rst changes that became very visible was the reinforce-ment of the stream of green investments and all investments that are under the umbrella of ESG factors. It is no coincidence that since the beginning of the year, the return of S&P 500 is 15%

02 Another sector that has a bright future ahead and achieved outrageous returns in the stock market in 2020, is the sector of electric vehicles and companies involved in the development of batteries and charging systems for this sector and beyond.

Τhe persistent shift to e-mobility fuels huge investments in all companies of this spectrum. And this triggers remarkable returns, which, however, if observed with caution will prove to be unable to cover the decline of previous years. This is because when many of these companies were founded, technology was very expensive and investments ended up being very loss-making.



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Although in 2020 we cannot predict how things will turn out, the outlook of all our portfolios for 2020 is given. These are di�erent portfolios, of di�erent level of risk, and each of these is addressed to speci�c investment pro�les.

Of course, a proper estimate of future cash needs makes even the most risk averse investor able to compose an overall portfolio with proper distribution between di�erent risk pro�les.

03 Another big trend that is emerging aggressively in 2020 and will be the spearhead for the next decades is the new payment systems and ways. In my opinion, this is the sector that will surge more than any other in the coming years, but there is no doubt that the global payment system will not be the same in the coming years and if this estimate leads to an establishment of the new payment system even by only 10% then we are talking about trillion capitalizations.

XSPOT WEALTH MODEL PORTFOLIOS - 2020

2020 has been a very challenging year for asset managers. An unpredictable and historically unique year in relation to return metrics data. Years like these that include powerful “black swans” are the ones that that are a strong criterion for whether all criteria and variables that have compiled each portfolio work as they have in the past and follow the framework that has been set. Doing this review and comparing XSpot Wealth Model Portfolios with at least 50 renowned portfolios, we are fully satis�ed that based on risk/ performance metrics, we are between Top 5.



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There follows the chart of the monthly returns of the Growth Portfolio for 2020. It is indicating that the closing of the toughest months since 2008, which are February and March, was only marked by marginal losses, revealing in that way how well the safety valves of the portfolio worked.



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In conclusion, all of our investment portfolios have managed to surpass this unique historical situation, and this is crucial for the long-term course of an investment.



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As we are approaching to the last trading day of 2020 we will recall this volatile and full of ups and downs year for the following unique moments : The rapid drop of stock prices in panic selling sentiment, owed to the breakout of the pandemic during the month of March.

The spectacular rally (+11.46%) on November the 9th following solid news on the vaccine e�ec-tiveness, one of the best months for the Greek stock market for the last decades (November +29.4%), a unique record of 15 trading days in a row with positive market closing prices. It is the �rst time for the last several quarters that sellers didn't �nd lower entry points to re-establish positions, a fact related to the speed of the re-rating of the perspectives of the Greek stock market for the mid to longer term investment horizon.

It is easily seen that year-to-date losses for the Athens General Index have narrowed to -13% while for the FTSE/A.S.E. Large Cap to -17.5%. Sectors with positive performance year-to-date are the FTSE/A.S.E. Utilities (+39%), the FTSE/A.S.E. Industrial Products and Services (+12%) and the FTSE/A.S.E. Technology (+9%). Stocks that posted noticeable gains for the week ended on 18.12.20 were Alpha Bank (+15%), National Bank of Greece (+13%), Ellaktor (+13%), Quest Hold-ings (+7%). ADMIE (+4%).

We consider the following set of factors as very important in investors e�orts to quantify the fair value of equities : a) the positive news from the vaccine development, b) the gradual return to lower tier levels of lockdown and c) the gradual attainment of a socially and �nancially accepted level of public health and herd immunity (through the vaccination within the next two months of a 25% - 40% of total population). If all above factors are positively activated and in sync then the exercise of the calculation of the time needed for the recovery of crucial sectors of the domestic economy (i.e. incoming tourism, outdoor dining, transportation) becomes easier.

The selection of the participants in the equity side of private and institutional portfolios for 2021 must take into consideration the ability of the Greek economy and the Greek listed companies to absorb rapidly the funds deriving from the Next Generation EU recovery fund. Due to the strong support of the European Institutions as well as the pro-business policies of the Greek Govern-ment, every week that passes provides additional data that Greece is continuously under the positive scope of international investors.

GREEK ECONOMY: CLOSING A ROLLER COASTER YEAR WITH A SHORT TERM CONSOLIDATION


Konstantinos Karlis

Head of Greek Branch


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Indicatevily, Moody's Ratings noted to a recent report that Next Generation EU is credit positive for countries that will absorb the corresponding funding. The increase of investments will act as a multiplier to the recovery of GDP and this is a hint for rating upgrades.

Positive e�ect on a national economy level is calculated as follows : Bulgaria (22% of GDP, Croatia (17% of GDP), Romania (12% of GDP), Greece (11% of GDP). It isn't irrelevant that strategic investments are taking place from well-established interna-tional groups domestically during the last quarters (e.g. CVC Private Equity is very active, the Dutch Group Reggeborg is also active as a key player in the construction sector). On the other hand the initiation of the sale of the 49% stake of PPC in HEDNO (Hellenic Electricity Distribution Network) is expected to further boost international investors' interest for Greek assets.

Back again to the Athens General Index which has entered to a short term consolidation stage during the last few days and in a typical year end slow moving trading mood. The new funds that have entered in the Greek market recently are considered to be of long term nature (12-24 month investment horizon) and as the last weeks of the year are a break time for traders, we expect new money to be activated in the beginning of 2021 and the so-called January E�ect to take place.

Any delay will bring impatience and will make anxious the short term players. As we are trading close to the 800 points currently, we detect strong support at 720-730 points in case of a retreat while next upside target is the level of 880-900 points as a hint of the measured move from 700 to 800 points.



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Risk Warning: When Investing, Your capital is at Risk. If you are not sure seek the advice of an independent �nancial advisor.

This document does not constitute and shall not be construed as a prospectus, advertisement, public o�ering, or placement of, nor a recommendation to buy, sell, hold or solicit, any investment, security, other �nancial instrument or other product or service. This document is for general information only

and is not intended as investment advice or any other speci�c recommendation as to any particular course of action or inaction.

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2020 puzzle completed · ΥΓΕΙΑ ΚΑΙ ΥΓΕΙΟΝΟΜΙΚΟ ΣΥΣΤΗΜΑhealth and sanitary...

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