Dramatic Fall in Goldilocks Investment Fund Performance in 2019

Once Shorn Is She Still Goldilocks?

After more than a year of total radio silence on its website, Goldilocks published a press release on its 2019 performance.

No surprises here that the news wasn't good. When a fund stops publishing glowing reports about acquisitions and realisations you don’t need to be Warren Buffet to figure out that things are not going well.

For FY 2019 the fund had a negative 7% return.

On the bright side, Goldilocks noted that its cumulative return since inception in July 2015 was 134%.

That sounds very good until one looks at earlier cumulative returns.

If I’m not mistaken, Goldilocks used to publish its return history on its website. Today for some reason I couldn’t find that information there.

But there are other sources.

On 12 February 2017 ADFG won the “Best UAE Equity Fund” award for its Goldilocks fund at the MENA Fund Manager Performance Awards 2017. According to the news article on WAM, Goldilocks had an “absolute” return of 226% in FY 2016 and its cumulative return since inception was 384%.

ADFG’s website shows a cumulative return through October 2018 for the fund of 219%.

Now if you're like AA, you might wonder why performance for the full year wasn't given.  Another sign that all is not well.

From the change from FY 2017 to FY 2019 in cumulative returns and the relatively small negative performance in FY 2019, you don't need a PhD in math or finance to figure out that FY 2018 must have been a dreadful year.

I suppose the thought was to let 2018 quietly slip into the memory hole and hope no one would notice.

Some of this stuff is just so laughably transparent as well as sad.

So to recap cumulative returns since inception:

1. 2016 - 384%
2. 2018 - 219%. But only 10 months.
3. 2019 - 134%.

In that context not so good.  A rather disappointing trend. 

And if an investor bought say in 2017 or 2018 (when the price was high), the cumulative returns would be much lower.

In the coming days, I’ll publish a series of three posts under the title: “Goldilocks and the Three Bears – A Financial Fairy Tale”.