First quarter report spy 500 VINX 2020

First Quarter VCM Wine Investment Fund Results 2020

US equity markets delivered their worse quarterly performance since the Great Recession of 2008. To put it another way, your portfolio never needed diversification and protection as much as it does right now. Asset classes which have resisted to the COVID-19 are very rare. Investor’s leitmotiv in this first quarter was “Flight to quality”, which can be translate as “buy safe heaven assets and raise cash”.

TLT, 20+ Year Treasury Bond ETF, returned an impressive 22% for the quarter.

However, not all safe heaven assets are created equal with Gold and Bitcoin returning 3.7% and -10.8% respectively. The yellow precious metal is vastly considered as one of the best hedging alternatives when extreme events occurs, and Bitcoin is regarded as the gold 2.0.

Considering the extremely high volatility of Bitcoin (760% between 2017 and 2020), we can make a case of the crypto currency being “only” down 10.8% versus 23% for the Dow Jones being encouraging. It might not be as impressive as gold, but gold has been traded since the beginning of time while Bitcoin only for 10 years.

An even better alternative to protect your portfolio during the unconventional times we are experiencing, is to invest in non-listed funds. It allows a portfolio to reach a higher degree of diversification from the market. However, it doesn’t mean that when the market goes up, non-listed funds goes down, and VCM is a very good example of that.

Our unique strategies based on opportunities to buy premium French wine bottles at distressed prices, and on value-add investments in vineyards, allow us to be insensitive to the market panic. Since we are invested in tangible (real) assets with values that are set by actual decreasing supply and increasing demand, we not only offer very low volatility but also benefit from a natural bid which explains our solid returns.

We can see that on the chart, during these high stress level periods, our funds are very stable. When, the market goes up, we’re going up too, but when the market goes down, our business model and asset class protect us from the disturbances.

How come can we both avoid market turbulences and benefit from market rallies, are we lucky and unsustainable, or are we truly an alternative investment solution. All our funds follow the same path and continue to grow consistently and rapidly, even when all of the world indexes are down a solid double digit from the beginning of the year. In 2019, the S&P 500 surged 29%, its best year since 2013, however, VCM funds returned 48,5% on average. This is the result of our hard work to find and offer at an international level, very rare and highly demanded French premium bottles as well as of our trustworthy network in the wine industry which help us find the vineyards with the biggest unused potential.

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