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During the month of August, Columbus Investment fell -0.97% versus -1.63% of the STOXX 600, -1.26% of the MSCI Mid Cap and -1.76% of the IBEX 35.

Year to date, performance is 12.48% and the 5Y and 7Y return is 27.44% and 80.25% respectively. Since the start of Columbus, in July 2008, we have return 97.51%, by far exceeding that of the European equity markets. The volatility of the portfolio remains at 11.7% much lower than the average of recent years and similar to the volatility of the STOXX 600.

August has been a month with substantial declines in equity markets in the first half of the month and a subsequent recovery. Economic uncertainties continue to weigh on global exchanges. Macroeconomic data shows weakness in the industrial production of Germany and China, while the situation in the United Kingdom, despite the parliamentary defeats of Boris Johnson, is at least very confusing regarding the kind of Brexit that will happen.

However, macroeconomic data in the US is mixed with consumption and inflation data at the top of expectations. Futures are now discounting that the Federal Reserve will lower rates up to 100 basis points until the end of 2020, with another drop now in September. We are still expecting an economic slowdown next year and although, we do not rule out a recession in the next twelve months, we do not expect it.

Our expectation is that the declines in rates both in the US and in Europe will have an effect and economic growth will accelerate again in second half 2020, with economies in the developed world avoiding contractions.

We continue to be sectorially positioned in consumer and service companies and with reduced positions in banks, industrial and natural resources as well as oil companies that have greater exposure to the economic cycle and have been the most affected by the declines of the last month.

The portfolio currently has very attractive average valuations, with PERs and EV / EBITDAS of one digit that nevertheless have sales growth and EBITDAS of two digits for the coming years. We continue to rely on our portfolio, which is diversified in companies with high capital returns and cash generation, with strong growth in both sales and EBITDA for the coming years at discounted prices.

As for the portfolio, during the month, as we have already pointed out Columbus has fallen less than the equity markets and year to date performance is 12.48%. During august, Avast, the Czech antivirus software company rose 18.2% and the Danish brewer Royal Unibrew rose 16%. Our exposure to the industrial and autos sector has decreased since the beginning of the year from 25% to 12.75%, almost half in line with our more cautious position on the economic cycle. We have also increased cash to 9%.

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Since June 14, 2018, the Master-Feeder structure between Inversion Columbus 75 Sicav (feeder) and the compartment in Luxembourg, Pareturn GVC Gaesco Columbus European Midcap Equity Fund (Master), has been operational. This structure allows domestic and foreign investors to access Columbus’s strategy from a vehicle established in Luxembourg, with two types of shares according to investment volume.

The creation of this structure does not carry any type of fiscal contingency for current investors. The compartment is available on the AllFunds, Inversis and MFEX fund platforms.

imagen ficha junio

During the month of June, Inversion Columbus rose +2.95% compared to +4.28%, +2.16% and +4.08% for the STOXX 600, IBEX 35 and MSCI Mid Cap indices, respectively.

Since the beginning of the year, profitability is 13.52%. Over a three and seven year period, performance is 20.19% and 87.59%, respectively, and since the beginning of Columbus, in July 2008, it is 99.33%, far surpassing the profitability of the aforementioned European equity indices. The volatility of the portfolio remains at 11.7%, much lower than the average of recent years and similar to the volatility of STOXX 600.

During June, the world stock exchanges partially reversed the strong declines of the previous month. The fear of the trade war’s consequences has given way to investors focussing on the measures that central banks will adopt. Futures are currently pricing in the fact that the Federal Reserve will lower rates up to 3 times in the next months with the first drop due next September. The ECB has also announced measures to support the banking sector. We continue to believe that although there is an economic slowdown, we do not expect a recession.

We continue to be positioned sectorially in consumer and service companies and with reduced positions in the banking, automotive, retail, natural resource and oil sectors that have greater exposure to the economic cycle and that have therefore been the most affected by the decreases of the last month.

The portfolio currently has very attractive average valuations, with PERs and EV / Ebitdas of one digit that nevertheless have double-digit sales growth and Ebitdas forecasts for the coming years. We continue to have confidence in our portfolio, which is diversified into companies with high returns on capital and cash generation as well as strong sales and EBITDA forecasts for the next few years at discount prices.

 

Country Distribution

With regards to the portfolio, Anima’s performance (+21%) has stood out. Last month, we already pointed out that we consider the valuation of the Italian asset manager to be very attractive given the decreases of previous months and because we expect corporate movements in the sector. AKKA technologies’ performance (+15.4% for the month, 48% for the year) is also worth highlighting. The French engineering firm announced strong revenue growth of 26%, propelled by AKKA North America’s revenue growth of 34%. We have taken advantage of these increases to reduce our position in Bodycote and sell our positions in Forfarmers, K + S and FLSmitdth.

Download monthly factsheet

Thank you for your trust.

 


Since June 14, the Master-Feeder structure between Inversion Columbus 75 Sicav (feeder) and the compartment in Luxembourg, Pareturn GVC Gaesco Columbus European Midcap Equity Fund (Master), has been operational.

This structure allows domestic and foreign investors to access the Columbus strategy from a vehicle established in Luxembourg, with two types of shares according to investment volume. The creation of this structure does not bring any kind of fiscal contingency for current investors. The sub-fund is available in the AllFunds, Inversis and MFEX fund platforms.

 

During the month of May, Inversion Columbus fell by -6.82% compared to -5.70% for the STOXX 600, -5.92% for the IBEX 35 and -6.14% for the MSCI Mid Cap.

Since the beginning of the year, the fund is up 10.26% which exceeds the growth of the three aforementioned indices: STOXX 600 +9.30%, IBEX 35 +5.44% and MSCI Mid caps Europe +10.05%. At five and seven years, profitability has increased by 21.30% and 94.06% respectively, and since Columbus’ inception, in July 2008, profitability is 93.62%, far surpassing that of the European equity indices. The volatility of the portfolio remains at 11.7%, which is much lower than the average of recent years and similar to the volatility of the STOXX 600.

During May, global stock exchanges partially reversed the strong increases of the current year. In this last month, the commercial war between the US and China has been reignited. The US imposed more tariffs on China (and vice versa) and threatened Mexico. The refuge in this
situation has been government bonds, which in many cases have reached historical lows in their profitability. The Bond Futures price in the Federal Reserves plans to lower rates up to 3 times in the next months. The ECB has also announced measures to support the banking sector. We continue to believe that while there is an economic slowdown, we do not expect a recession.

We continue to be positioned sectorially in consumer and services companies. In contrast, we hold reduced positions in the banking, automotive, retail, natural resource and oil sectors due to their greater exposure to the economic cycle (these stocks were those that were most negatively impacted last month). We have sold our position in Rotork, thus further reducing our exposure to industrial companies.

The portfolio currently has very attractive average valuations, with PERs and EV/Ebitdas of one digit that nevertheless have double-digit sales growth and Ebitdas for the coming years. We continue to have faith in our portfolio, which is diversified into companies with high returns on
capital and cash generation, with strong growth in both sales and EBITDA for the next few years at discount prices.

 

Country Distribution

Throughout May, the companies in the portfolio have continued to publish their first quarter results. AKKA technologies has proven to be a standout performer (0.8% for the month, 37.3% for the year) with the French engineering company achieving revenue growth of 26% of the back of its North American division’s revenue growth of 34%. Amplifon (9.7% for the month, 44.4% for the year) has also shown significant growth. The Italian company, who are the market leaders in the hearing aid market, grew revenue and profits by 26% and 33%, respectively, to €392m and €19m. Finally, Autotrader (1.2% for the month, 21.4% for the year), the UK market leader in used car sales, published strong results with revenue and operating profits growing by 8% and 10%, respectively.

On the other hand, the Italian investment management company, Anima (-13% for the month, -14.2% for the year), reported a fall in profits as a result of a drop in performance fees. We maintain the stock due to its valuation and because we expect corporate movements in the Italian investment management sector.

Since June 14, the Master-Feeder structure between Inversion Columbus 75 Sicav (feeder) and the compartment in Luxembourg, Pareturn GVC Gaesco Columbus European Midcap Equity Fund (Master), has been operational.

This structure allows domestic and foreign investors to access the Columbus strategy from a vehicle established in Luxembourg, with two types of shares according to investment volume. The creation of this structure does not bring any kind of fiscal contingency for current investors. The sub-fund is available in the AllFunds, Inversis and MFEX fund platforms.

Download monthly factsheet

Thank you for your trust.