The Collins St Value Fund delivered a gross return of 44% in CY 2020 – 41% higher than the ASX 200 over the same time period and achieving the #1 ranking out of all long only Australian equity funds for the year as measured by Mercer.
To access the Fund’s December 2020 Quarterly Report please click here and to access a free webinar where the team outline their macro views for 2021 and a selection of high conviction stock calls please click here.
Fund Manager Commentary
According to Michael Goldberg, Portfolio Manager at Australia’s #1 ranked ‘Value’ Fund:
CY 2020 was a challenging year for many investors, both professional and retail. Whilst many people conceptually understand the idea of buying low and selling high, in practice not many people are able to actually do this. When stock prices go low most investors are either paralysed by fear or over think things and hope they go even lower still – very few have the mandate, mindset and governance structure in place to allow large, contrarian positions to be implemented quickly in their portfolios.
Some of the high conviction stock calls driving returns within the Collins St Value Fund throughout CY 2020 include
– Boom Logistics (BOL.ASX): +80%
– Coronado Global Resources (CRN.ASX): +58%
– National Tyre and Wheel (NTD.ASX): +105%
– Paladin Energy (PDN.ASX): +150%
These positions are reflective of the unconstrained, high conviction mandate that the Collins St Value Fund is run to. A complete representation of the sector exposures within the Collins St Value Fund as at 31 December 2020 is shown below:
Michael Goldberg goes on to say:
I prefer to think of the ASX as being a market of stocks rather than a stock market. In the current low interest rate environment there are too many stocks and sectors trading well beyond any objective measure of their intrinsic value, making genuine active management more important than ever. Delivering a profit for clients is often just as much about saying no to a bad idea as it is saying yes to a good one.
For that reason we’ve deliberately kept a healthy cash balance in the Fund, and stayed well clear of over priced tech stocks which are simply a train wreck waiting to happen, and over priced cap raises which were a bad deal from day one.
Finally, Michael observes that:
Whilst our 44% gross return in CY 2020 was certainly a great result, investing in equities should never be a short term game and should absolutely never see an investor depart from their core investment philosophy. As a ‘value’ investor we’ve stuck true to what we believe in, even during a market that many characterised as only favouring ‘growth’. In doing so, we’ve been able to post a 24% per annum gross return since 2016 – testament to the fact that properly understood, and properly applied, value investing can outperform in any market environment.
For more information, or if you are considering making an investment into the Collins St Value Fund please contact:
Rob Hay – Head of Distribution and Investor Relations
Ph: 0423 345 975
About the Collins St Value Fund
The Collins St Value Fund brings a distinctively different approach to the management of Australian equities.
Boutique by design, bespoke by nature. The Collins St Value Fund is:
– Always seeking to challenge the status quo in the delivery of superior investor outcomes, with a focus on capital preservation first and foremost. This can lead us towards quite a unique portfolio of investments which, over time, have been underpinned by a range of bespoke convertible note, take-over arbitrage, special dividend and management buy-out investments, alongside unconstrained access to any ASX listed stock.
– Genuinely high conviction and does not attempt to be ‘all things to all people’. The number of portfolio positions is typically between 8 – 20 and we are not afraid of putting up to 10% into an idea regardless of where it sits in the All Ordinaries Index. We believe superior returns are best achieved with deep and differentiated insights into a small number of stocks – after all, the wider the research and more diverse the holdings the more ‘index’ like returns you can expect.
– Passionately unconstrained. True value knows no boundaries and a true investor should be free to pursue them, wherever in the market they may be found. The Fund has, in the past, taken significant exposures to Gold, Uranium, selected Pharmaceutical stocks and niche Property Services and Infrastructure companies, whilst maintaining the freedom to allocate to Cash in the absence of an otherwise compelling opportunity.
– Truly aligned. Investors in the Fund need to make money before our business does. If your investment does not increase in value we receive no management fees, it’s that simple. The complete absence of any fixed management fees incentivises both capital preservation and careful management of capacity.