Our 2017 annual letter
January 22, 2018,
Dear investors and followers,
2017 will remain as an extraordinary year on so many levels that it is difficult to know where to start. It was an emotionally charged year with our charity event and Hurricane Harvey, which devastated parts of Houston but the year was also marked by the massive gains recorded on the Vietnamese stock markets.
Our global approach to investment
Anh Thomas Investment is a financial advisory firm that aims to find the best investments worldwide. We currently focus on two specific types of assets: Vietnamese stocks and Texan Real estate market. Stocks provide the best returns over the long term and advising our clients on this type of assets remains our core business. Since diversification is important, we also advise our clients on Real Estate assets, which allows our clients to obtain returns that are less volatile (but unfortunately also lower) than stocks.
2017 Vietnamese Stock Market review
The Vietnamese stock markets have had an exceptionally strong year in 2017. In fact, the two main indexes ended the year with respective annual performance of +45.9% (HNX index) and +48.0% (VN index). These strong performances can be explained by several factors including positive macroeconomic developments. In 2017, Vietnam's economy had another year of strong growth (6.8%) and broad macroeconomic stability. In addition, Vietnam attracted foreign direct investment (FDI) of 35 billion U.S. dollars in 2017, the biggest amount over the past 10 years.
Our Stock performance for 2017
Because Anh Thomas Investment is an advisory company and not a fund, there are different ways to look at our performance. The performance of our benchmark portfolio is published monthly and reflects the true performance of our strategy. However, each of our clients holds a stock portfolio with a unique composition and performance. This is because each investor has his/her own characteristics with different attitudes to risk and different timing in cash flows and that some of our clients sometimes decide not to follow all our advices.
In 2017, our benchmark portfolio underperformed the main indexes for the first time since its creation. While our portfolio focuses on value stocks, large market capitalized stocks have attracted most foreign investors over the last twelve months. Nonetheless, our clients have once again made large returns this past year and half of them (see Median client return above) achieved returns exceeding +24.4%. In average, our clients returned +23.0% in 2017.
Our long-term Stock performance
Looking at our performance in 2017 is obviously interesting, but the best way to earn money on the stock market is to take a long-term approach. High returns over a short period can indeed be due to luck (the reverse is also true), while long-term returns reflect the real quality of a strategy. The table below gives an overview of our performance since our inception almost seven years ago.
Since May 2011, our client’s portfolios have massively outperformed the indexes and half of our clients have achieved returns exceeding +333.3%. In average, our clients returned +325.4% over the last seven years.
Real Estate review and performance
Hurricane Harvey caused devastation in Houston but none of our client’s properties was hit by flooding. This was not due to chance but to our well-planned strategy. Harvey turned out to be extremely powerful but an investor should always do his/her homework and it is well-known that Texas is often the theatre of that kind of extreme weather. As a real estate investor, it is an absolute necessity to take into account all types of risks and protect your interests as much as possible notably by selecting areas less prone to flooding. Despite Harvey, Houston’s average sales price of single-family homes for the year 2017 was, up 2.9% from a year ago, and the median price was up 3.8%.
Since we first started advising our clients to invest in Houston real estate market, prices have increased by more than 50%!
2017 has been a terrific year for the Vietnamese stock markets. However, this left us with mixed feelings. This is naturally good news for our current clients who made large returns this year once again, but there are also mechanically less opportunities left for new investors. Even though it is hard, if not impossible, to predict how the stock markets will react over the next couple of months, we remain bullish about Vietnamese stocks over the long term (5 years and more). In the meantime, finding the best investment opportunities worldwide remains our top priority and we may come up with new investment projects, in different countries (notably in Africa and South America).
Our business model works really well and we keep expanding our client base mainly by word of mouth. Our clients come from many countries and contribute to make our company even more international.
On behalf of everyone at Anh Thomas Investment, we would like to thank you for your support. May 2018 come filled with happiness and the success you deserve.
CEO & Director of Anh Thomas Investment