2019 has, in the eyes of most financial commentators, been a typical ‘growth’ market. Momentum driven names in the typically ‘growth’ centric technology sector has seen some price to earnings multiples blow out to nearly 200 times their forecast earnings…….in 2021!
So how, when faced with such extreme price action in the ‘growth’ segment of the ASX has the Collins St Value Fund not only risen to the top of the ‘value’ leaderboard but as at 31 October 2019 outperformed all of the ‘growth’ funds in Morningstar’s large-cap universe as well?
Quite simply, by doing things differently.
Underpinned by a patient, objective and high conviction stock selection process, the Portfolio Managers at the Collins St Value Fund have the freedom to pursue only the absolute best investment ideas at any one point in time. Indeed, current portfolio weightings are entirely outside of the ASX top 20, with a skew towards a bespoke blend of uranium companies, small-mid cap gold miners, financial services stocks and pharmaceutical/health care holdings. The portfolio also currently has a material cash weighting that can be rapidly deployed should sound business models and industry dynamics make themselves available at heavily discounted entry points.
At a more granular level, low price to earnings multiples, low debt to equity, proven business models and credible management are what the Portfolio Managers are looking for in a company. Thoughtful consideration, not reckless speculation, is what the Portfolio Managers believe will drive superior investor outcomes.
The extent of the Collins St Value Fund’s outperformance has been significant.
For the 12 month rolling period to 31 October 2019 on an after-fee basis (and as measured by Morningstar) the Collins St Value Fund returned 42.41% after fees for the 12 month period to 31 October 2019. That’s 15.57% ahead of its nearest growth rival, 19.98% ahead of its nearest value rival and 23.13% above the S&P ASX 200 Index.
With no fixed management fees underpinning an unwavering focus on capital preservation, capacity management and superior portfolio returns, the Portfolio Managers at the Collins St Value Fund are excited by the opportunities current financial uncertainties are presenting and look forward on building upon the success of 2019 into the future.
The Collins St Value Fund aims to preserve and grow the wealth of private investors and their families both now and for future generations. The Fund, which has delivered ~20% gross returns p.a. since establishment in 2016, seeks to achieve this goal through a bespoke combination of patience, conviction, freedom and objectivity.