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ASX 200 Index L1 L1 CAPITAL L1 Long Short Fund Limited Investor Letter | DECEMBER 2020 The Company's NTA increased 34.4 % for the quarter ( ASX200AI + 13.7 % ) and 29.5 % for the 2020 calendar year ( ASX200AI 1.4 % ) ¹ . The Company had its best quarter and year on record driven by strong stock picking across a wide range of sectors . Returns were further supported by the positive vaccine announcements in November . The vaccine results from Pfizer , Moderna and AstraZeneca were exceptionally strong , indicating high efficacy and safety levels from Phase 3 trial data . We believe the vaccine news and roll - out will trigger an enduring rotation into value and cyclical stocks ( which lagged the market dramatically in 2020 ) . This should be a major positive tailwind for performance in 2021 and beyond . 2020 in Review As we turn the corner on what has been one of most volatile years of our investment careers , we have been reflecting on our positioning throughout the year , the key decisions we made and the outcomes for our investors . First , we would like to sincerely thank our investors and advisors who have supported us through this extraordinary year . We could not be more pleased that your consistent faith in us has been rewarded with such strong performance . Our investment team worked incredibly hard this year to navigate the crisis , identify the best opportunities and assess the timing and likelihood of vaccine success . 2020 represents the second consecutive calendar year where the portfolio has delivered net returns above 25 % . 2020 was certainly " unprecedented " in many respects , with market volatility at extreme levels as we dealt with a prolonged period of elevated risks from the COVID - 19 pandemic , global trade wars , Brexit , U.S. election uncertainty and more ( Figure 1 below provides a pictorial representation of some of these key events ) . While the ASX 200 ended the year broadly flat versus the prior period , this has masked the extraordinary level of volatility we have seen during the year . The ASX 200 had more +/- 3 % days in 2020 ( 22 ) than the previous 11 years combined ( and the most recent year exceeding 2020 was during the GFC in 2008 at 40 times ) . We have also seen both the fastest bear market and the fastest bull market recovery in history play out over the past 9 months . The market sold - off sharply as economies were closed down globally in March due to COVID - 19 and rebounded strongly thereafter as governments and central banks unleashed a torrent of fiscal and monetary support , lockdowns eased and confidence in the development of effective vaccines increased . As a comparison , the GFC took nearly 24 months to reflect a similar downturn and subsequent recovery . Figure 1 - 2020 Pictorial Review 7,500 7,000 Spike in JPM EASE ( Aus ) Record ASX high of 7,162 First COVID - 19 deaths outside of China Market rally 6,500 following Dec 19's underperformance 8 % RBA cuts O cash rate Australia's first COVID - 19 fatality Over 50 % of ASX 200 provided guidance updates in Mar 20 6,000 5,500 WHO declares COVID - 19 a World Health global pandemic Organization 1H GDP forecast cut to 10.6 % Feb 20 Results Season : Ratio of ' beats ' was an improvement on Aug 19 , but below average . 41 % of Index downgraded EPS . 5,000 Stimulus package QORBA cuts cash rate 8 % QUARANTINE Borders closed to non - residents Feb Mar closed Negative oil price Caital raisings totalling $ 8bn in Apr Nov 20 : Value outperforms growth by 1172bp . All time record for MSCI Australia Value Index . Vale downgrades iron ore production guidance Consumer and business confidence recover Pfizer vaccine U.S. Presidential Election BIDEN VIC lockdown Australia records over 800 new daily cases Federal budget Gold reaches new highs of $ 2,063 Second wave Record savings Iron ore price First recession rally + 20.7 % ) - in 27 years 4th largest move on record in U.S. and Europe rate of 20 % RBA cuts cash rate 201 8 % JobKeeper APRA dividend guidance 3 - step reopening plan reopening Aug 20 Results Season : Disappointing season with 40 % downgrading EPS . Worst rate of ' misses ' in 5 years . 4,500 Jan -Fed announced unlimited buying Apr May Jun Jul Aug Sep Oct Nov Dec Source : JP Morgan , Bloomberg Finance LP , Shutterstock as at 31 Dec 2020 1 The Company is L1 Long Short Fund Limited . Net performance is calculated using the movement in NTA pre - tax . Performance is shown net of all applicable fees and charges . Past performance should not be taken as an indicator of future performance . Investor Letter | DECEMBER 2020 | L1 Long Short Fund 1