Monthly Archives

December 2021

Pacem Raise Vital Funds for Survivors of Suicide

Pacem is delighted to announce that a total of £4786.50 was handed over to Survivors of Suicide Support Group as a result of the team fundraising effort for the Belfast City Marathon, which took place on 3rd October 2021. Members of the Pacem team undertook the gruelling marathon in a bid to raise money and awareness for a local, East Belfast charity, that exists to help those who have been bereaved or affected by suicide, a situation that sadly, too many families have been touched by.

Pictured at the handover over last week, Claire Curran, Head of Services, Survivors of Suicide Support Group said, “These vital funds raised by Pacem will be used to support those who have been bereaved or affected by suicide. Our organisation helps alleviate distress and offers assistance to people who have suffered loss through suicide or anguish through self-harm by loved ones, in particular by the development of support systems within the community. These funds will go  a long way in helping people in the local community that need us during these times and we can’t thank the team at Pacem enough for their hard work and efforts”.

Pictured L to R:
Lyn McMaster, Director, Pacem, Claire Curran, Head of Services, Survivors of Suicide Support Group, Julie Wright


FOMO may be bad for your wealth

It feels at the moment that the markets have gone a little mad.  Almost everything you hear on the news or read about investing suggests that everything is going up.  The US market is up by around 44% in the past year[1] in dollar terms, Tesla’s share price has risen by 124% over the same period, and Lucid Motors, who have just started production on its electric car in Q3, for which it has (a mere) 13,000 orders, floated on the NYSE and already has a market capitalisation greater than that of Ford, after its share price doubled in a month!

In the US, call options on individual company shares, which provide investors the right to buy a stock at given date in the future at a predetermined price in return for a premium payment, currently exceed the value of actual shares traded by value by almost a half.  Options are a way of leveraging exposure to a stock without having to come up with the face value of buying the stock directly.  They are a sure sign of speculation, not least by retail investors.

There is no doubt that when markets become frothy, investors are prone to a fear of missing out (FOMO) that makes them wish that they were invested in something that has done well (mostly identified with hindsight) and tempting some to lose discipline and plunge in, hoping that the magic (luck) will continue.  When things do not go as hoped, there is a temptation to cut losses and run.

Let’s take a quick look at the ARK Innovation ETF that has hit the investment news headlines as one of the best performing funds in 2020, gaining over 150% in US$ terms, and more importantly how investors in the fund have fared.  It is a very concentrated portfolio of technology and healthcare innovators.  It holds more than 10% in Tesla and the top 10 of 45 or so stocks make up more than 50% of the portfolio. The firm also owns more than 10% of the shares of a number of portfolio stocks, which raises liquidity risks (remember Woodford?).

In the case of ARK Innovation, it had a stellar run from April 2020, out of the bottom of the Covid-induced sell-off until December 2020 but has struggled since then, falling almost 35% at one point in the first few months of 2021.

Figure 1: Fund flows often follow performance

It is worth noting that the fund had inflows of just US$25 million in Q4 2019 but these peaked at almost US$ 7.8 billion in Q4 2020.  You do not have to be a mathematician to work out that the investor money that went into the fund at the back end of 2020 will have not captured the bulk of the positive returns of 2020 and suffered the subsequent downswing. A rough calculation using monthly performance and fund flow data suggests that from the start October 2019 to the end of October 2021 the fund delivered an annualized return of 66% p.a., whereas the average investor return was around 25% p.a. i.e. a 40% p.a. difference.[1] Over this same period a well-known US index fund delivered 26% p.a.!1

ARK Innovation relies on manager skill (or luck) in picking a mere 45 or so companies out of the many thousands of companies around the world.  The risks are very high. The fund management world is littered with the corpses of such ‘stellar’ funds.  In the UK for example, over the past twenty years or so, around half of all investment trusts launched have failed to survive[2] in their original form.

It is hard not to suffer FOMO at times like these, but it is worth remembering that investing is a not a sprint but a marathon.  When markets rise substantially, as they have done recently, regular rebalancing results in the sale of assets that have performed well and banks the excess proceeds.  Seemingly irrational markets can persist for a long time and as the old saying goes, no-one rings the bell at the top of the market.  Stay invested, remain diversified and be thankful that your financial well-being does not lie in the hands of any one fund manager owning just 45 stocks.  Remember that it is the tortoise who wins the race.

Risk warnings
This article is distributed for educational purposes and should not be considered investment advice or an offer of any security for sale. This article contains the opinions of the author but not necessarily the Firm and does not represent a recommendation of any particular security, strategy, or investment product.  Information contained herein has been obtained from sources believed to be reliable but is not guaranteed.

Past performance is not indicative of future results and no representation is made that the stated results will be replicated.


[1]     Albion Strategic Consulting used an XIRR calculation with monthly fund size, flows and performance data and assuming fund flow occurred at the start of the month.  It provides a rough estimate and order of magnitude insight.  Daily data unavailable.

[2]     Numis, as quoted in: Investors Chronicle. Surviving the investment trust shake-up August 6, 2020, By Dave Baxter

[1]      Vanguard Total Stock Market Index Fund in US$ Admiral share class

Employee Spotlight – Lyn McMaster

Each fortnight we will be spotlighting a member of the team so that you can get to know the people behind the Pacem brand. This week we feature one of our financial advisory directors, Lyn McMaster. Lyn joined the firm, with over 30 years’ financial services experience, as part of our merger with Redrock Financial. As Head of Operations, she supports our team and ensures that we meet all our client’s needs.

Lyn tells us a bit more about herself below.

Employee name
Lyn McMaster

Your role at Pacem
Practice Manager

How long have you been with Pacem?
Just over 2 years, prior to this I was a Director in Redrock Financial with Alison Bell for over 17 years.

What does your day-to-day role entail?
My role is to work alongside the other Directors and the team to ensure we achieve company goals and objectives and deliver excellent client service. I am fortunate that with many years of experience in financial services I can support our clients when required as well as manage and encourage our team. Daily, I can be in conversation with a new client, interviewing applicants for a role in Pacem, working with our HR Consultant or listening to a problem.

How would you describe yourself in three words?
I hope that I am Professional, Supportive & Honest

Tell us something that might surprise us about you.
I love sporty cars

What do you like most about your job?
Without a doubt, the people. A high percentage of my job satisfaction comes down to the people I work with. I have been privileged in my career to have worked with some great people who have mentored, guided, and influenced me along the way.

What would you do (for a career) if you weren’t doing this?
I always wanted to be a Nurse (although I would happily deliver customers cars for Ferrari)

Favourite book(s)
How to be a Domestic Goddess by Nigella

Where is the best place you’ve travelled to and why?
I have two favourite places, both, have amazing beaches but quite different climates. I have wonderful memories of childhood holidays in Donegal, and we still go as a family every Easter. The other place is Anna Maria Island in Florida where I have been going for many years with my husband and children. I enjoy the slow pace of life they offer, and they are both just a great escape from routine.

If you could learn to do anything, what would it be?
Learn to play a musical instrument (I did play the piano, but I would need a few lessons!)

What interests/hobbies do you have outside of work?
My family and friends are a huge part of my spare time. I have four Grandsons (Noah, Theo, Luca & Micah) and my husband and I love spending time with them, cheering them on at their football, taking them on days out and spoiling them. My husband and I enjoy long walks in the countryside or coast appreciating the wildlife. When I am chilling out at home there is nothing, I love more than to bake on my Aga.