This was our first introduction to the fund. It has struggled in the recent market crash and this was an opportunity to learn more about the strategy and what it is looking to achieve. The fund looks to invest in between 200 to 300 companies at the lower end of the market cap, which are mispriced by the market and offer investors opportunities.
The fund has a domestic focus and has a large number of holdings to ensure there is plenty of liquidity due to the market they are investing in. In the current market crash they explain that their job is to buy equities and they are looking to set up the portfolio to maximise returns coming out of this.
What they are finding is that people are selling quality companies at cheap prices. Their view is that everything has been sold with reckless abandonment and indiscriminately, and this provides opportunities. They have gone through every holding to look at the balance sheets and make a view on whether companies can recover. This has seen them removing most of their energy, industrial and financial holdings. They have added to tech and infrastructure. Healthcare is another area they like, particularly areas like surgery centres, testing centres, diagnostics etc:- anything that reduces time in hospitals….read more