A Long/Short diversified portfolio of European equities employing a part fundamental/part tactical approach.
The Verrazzano European Long/Short fund employs a fundamental, research-driven stock picking approach to investing combined with a tactical trading component. One half of the portfolio provides exposure to our best medium term long and short ideas (40-60% core ideas), and the other half seeks to take advantage of short term market anomalies (40-60% tactical ideas).
The portfolios are subject to diversification in terms of geography and sector, providing a balanced approach to investing in European equities, delivering +4.12% annualised net returns since inception with an annualised volatility of 4.47%.*
*Source Verrazzano Capital: +4.12% annualised net returns since inception with an annualised volatility of 4.47%.*as of 31/09/2017. Past performance is not predictive of future performance. Such investment strategies entail risks which are described in the prospectus and Key Investor Information documents of the funds.
The Verrazzano European Long Short (“VELS”) fund is a UCITS compliant Long Short fund based on the Opportunities strategy, an Irish Qualifying Investor Fund that launched two years earlier. The strategy aims to deliver a pattern of returns with lower volatility than and low correlation to the market.
VELS is a European equity long short UCITS. The strategy adopts a fundamental approach to stock picking with active portfolio management. The portfolio is a combination of core long-term fundamental holdings and shorter term tactical investments. The strategy typically employs 40-80 stocks including longs and shorts with a gross exposure of 50% to 150% and a net exposure ranging between -10% to +40%. The strategy recognizes the value of compounding returns without jeopardizing a long term track record.
The Funds proved resilient in November, but the month itself was rather frustrating, as European equity markets retreated, at a time when the US and Asian markets were on a roll, pushed on by their tech behemoths, with banks taking the baton towards the end of the month. No piece of news can seemingly derail the march upwards and onwards of the US market, which has just registered its 13th consecutive up month, something not many people have witnessed in their lifetimes.
It is all the more frustrating as the macro backdrop for the Continental European economies continues to go from strength to strength, with the German IFO hitting 50-year highs, and with the traditional laggards of Italy and France witnessing loan growth, booming consumer confidence, rising GDP growth expectations, and all of that without inflation rearing its ugly head (yet). True, there is never a dull moment on our old Continent, with Cataluna, Germany and Northern Ireland grabbing the headlines recently. But solutions could be found in the near term, and in the meantime, domestic companies are thriving in this new environment of top line growth, pricing power, increased confidence and visibility, with record low interest rates.
So, what is holding Europe back? Firstly, the stronger Euro this year, as the seemingly doomed currency last year, has gone up from 1.06 to 1.18 in 2017, while most other regions are succeeding in continuing to debase their currencies. Secondly, the lack of proper M&A action, even after such a prolonged period of limited activity. Last but not least, the second wave of investment into European equities has not yet properly materialized, apart from a spurt in September. Money flows have preferred to continue to play it safe in Europe, by favoring the big multinationals, exposed to global GDP growth rather than domestic GDP growth, at a time when the FX exposure will go against them. Pharmas have been very poor, but staples, defensives and global cyclicals continue to be the darlings of foreign investors.
All other things being equal, we remain constructive on European equities, with the belief that domestic value plays should eventually attract the incremental money flows from here on in. Having said that, recent sector rotation has offered very compelling entry points in the likes of AB Inbev and Reckitt Benckiser. We also believe that Telcos, one of the big value traps of this year, should finally attract investors, as was the case late in 2016, when they finally had a bout of strong performance. Last but not least, we expect some of our big bets to finally perform for us, having traded sideways most of this year (Imperial Brands, ThyssenKrupp, Shire).
While we slightly reduced our exposures in the early days of December, we are maintaining a reasonably high level of gross and net exposures of 131% and 30%.
Guillaume Rambourg, December 08, 2017
|Class||Class Type||Inception date||ISIN||Bloomberg||Management Fee||Performance Fee||Passported|
|EI EUR||Accumulation||26/03/14||LU1019497616||VELSEIE||1.25%||20%||UK, DE, IT, SP, SE, LU, SW, SG|
|EI USD H||Accumulation||10/06/14||LU1019497889||VELSEUH||1.25%||20%||UK, DE, SP, SE, LU, SW, SG|
|EI GBP H||Accumulation||26/03/14||LU1019497707||VELSEGH||1.25%||20%||UK, LU, SW, SG|
|I EUR||Accumulation||02/07/15||LU1019497376||VELSIEU||1.50%||20%||UK, DE, IT, SP, SE, LU, SW, SG|
|I USD H||Accumulation||09/02/16||LU1019497533||VELSIUH||1.50%||20%||DE, SP, SE, LU, SW, SG|
|I GBP H||Accumulation||26/03/14||LU1019497459||VELSIGH||1.50%||20%||UK, LU, SW, SG|
|I GBP H||Distribution||28/01/16||LU1045160923||VELSIGD||1.50%||20%||UK, LU, SW, SG|
|R EUR||Accumulation||28/01/15||LU1019496998||VELSREU||2%||20%||DE, FR, FI, IT, SP, SE, AT, LU, SW, SG|
|R USD H||Accumulation||04/02/15||LU1019497293||VELSRUH||2%||20%||DE, FR, FI, IT, SP, SE, AT, LU, SW, SG|
|R GBP H||Accumulation||04/02/15||LU1019497020||VELSRGH||2%||20%||LU, SW, SG|
|C EUR||Accumulation||04/02/15||LU1045160683||VELSCEC||1.50%||20%||UK, DE, FR, FI, IT, SP, SE, NL, AT, LU, SW, SG|
|C USD H||Accumulation||04/02/15||LU1045159917||VELSCUH||1.50%||20%||UK, DE, FR, FI, IT, SP, SE, NL, AT, LU, SW, SG|
|C GBP H||Accumulation||23/09/15||LU1045160766||VELSCGH||1,5%||20%||UK, LU, SW, SG|
|C GBP H||Distribution||16/10/15||LU1045159834||VELSCGD||1,5%||20%||UK, LU, SW, SG|
|C CHF H||Accumulation||11/04/16||LU1377977985||VELSCCH||1.5%||20%||LU, SW, SG|
This table was established by Verrazzano Capital which is the UCITS management company for the Verrazzano SICAV. Although best efforts were made in gathering data and designing the table, Verrazzano Capital and the Verrazzano SICAV do not make any representation as to the accuracy and completeness of its content. This table may be subject to frequent updates and therefore may not be fully updated at this moment in time. It is your responsibility to ensure that the version you are using is the most up-to-date. There are numerous risks associated with equity investing, including but not limited to liquidity risk, currency risk and market risk. All risks should be carefully understood and considered before making any investment. All relevant details are available in the related prospectus and Kiids which are available on this website. The information on this website should not be construed as an investment advice. Past performance is not indicative of future results. .