First 100-days as a UCITS fund
On March 24th we reached our 100th trading day for the European Best Ideas strategy as a UCITS-fund. Since than we have:
- Launched an EUR-class next to our original SEK-class
- Been mentioned in Nordnet “Sparpodden” as one of the new interesting fund concepts this year
- Made available for investment of savings via the Swedish Pensions Agency
- Made available for retail investors via MFEX/Fondtorget
- During the period we were 390bps ahead of Eurostoxx 50 at best and 186bps behind at worst. At the end of the period we were 152bps ahead of the index.
- During the period we were 115bps ahead of Eurostoxx 600 at best and 347bps behind at worst. At the end of the period we were closing the gap but still lagging 77bps. We believe that if we remain in a stock-picking friendly environment we will be able to also come back ahead of our second benchmark.
What surprised us the most?:
We were most surprised by the initial period of high correlation to our benchmarks despite having >95% active share. As it turned out this correlation started to wear of as markets stabilized.
The fund experienced a period of underperformance, how did we view this?
Past performance is not a strong indicator of future performance. But we know that the strategy has historically experienced drawdowns vs. benchmark of up to 5%. We were far away from those levels so we felt comfortable. Although the strong macro rally around the ECB-meeting was somewhat stressful, we knew that the managers that we track are stock-pickers and would not be exposed to a prolonged macro-based rally. For example we don’t find any large peripheral banks amongst the top holdings of the managers that we track. Fortunately the rally lasted only 1 day and was followed by the funds longest winning streak against the benchmark.