Collins St Asset Management are pleased to announce that their flagship Collins St Value Fund has been ranked #1 out of 113 peers as measured by Morningstar, having delivered a return net returns of 6.7% for the month of August 2020.
This result, which was 3.7% higher than the average of the Morningstar peer group, and 3.9% higher than the broader market, was underpinned by a deeply contrarian, high conviction portfolio of only 20 different positions selected without any consideration of index weight.
Insights into a selection of high conviction, deeply contrarian portfolio positions (NTD, ISU, DCG, PAR & CCV) post their ASX Reporting Season announcements have been provided by the Collins St Value Fund’s Investment Team and can be accessed via this link.
Being deeply contrarian and backing unpopular companies has been rewarding investors in the Collins St Value Fund with above market returns for far longer than just one reporting season. Net returns of 12.7% since inception nearly five years ago (February 2016) have beaten the broader market by 4% p.a. – demonstrating the value in taking high conviction positions, judiciously holding (and deploying) cash and looking for profit where others won’t (or can’t).
But being deeply contrarian alone is not enough.
According to Michael Goldberg, Managing Director at Collins St Asset Management and Portfolio Manager of the Collins St Value Fund:
“Our contrarianism is more a way of thinking than a goal in itself. Sometimes stocks are cheap for a reason. It is an investors job to find overstated pessimism and to test their view using primary evidence”.
Patience, an unwavering commitment to objective due diligence and a genuine medium to long term investment horizon are also essential ingredients in the delivery of superior investor outcomes.
Michael Goldberg goes on to say:
“You can get rich slowly or you can get poor quickly. Timeframes and outcomes rarely cross over”.
About the Collins St Value Fund
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.