December 2020 Quarterly Report - Strategic Selection Fund - European Value

270121 Market Commentary

December 2020 Quarterly Report - Strategic Selection Fund - European Value

Executive Summary

  • Performance overview
    • MSCI Europe was up 10.8% during Q4 2020
    • Strategy up 12% (share class A Eur), outperforming market by 1.2%
    • Performance again driven by stock picking: Increased focus on quality has started to yield results.
  • Investment cases
    • 5 new names joined the portfolio, 3 names were sold
  • Market environment & outlook
    • European markets attempted a recovery in Q4 with a rotation into value names.
    • The reflation trade is alive and well.
    • European equities remain under-owned and cheap relative to the US.
    • The underperformance of value has reached unsustainable levels.
    • We remain true to our value investment principles we have applied over the last 2 decades at the same time putting extra focus on the quality of the businesses and sustainability of cash flows.
    • Median margin of safety of portfolio 35%.
    • 8% Cash left to seize new investment opportunities.