Jarrod Cahn Fund Manager - Credo Global Equity Fund - Boutique Collective Investments
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Jarrod Cahn Fund Manager - Credo Global Equity Fund
Last time we spoke…..
….. we asked can you afford to mistime the “rotation trade”?
Source: Bloomberg as at 16 Sept 2020 2
Here is what happened next…..
….. Late year rotation to value
Source: Bloomberg as at 19 Jan 2021 3
Maybe Value isn’t dead?
Source: Bloomberg as at 21 Jan 2021 4
2020 performance strong, particularly against Value
150
Credo Global Equity Fund
145
140
141.5
MSCI World Net Total Return Index (GBP)
135
MSCI Value World Index Net Total Return (GBP) 132.6
130
125
Cumulative Return
120
115
110 110.6
105
100
95
90
85
80
Jul-2017 Oct-2017 Jan-2018 Apr-2018 Jul-2018 Oct-2018 Jan-2019 Apr-2019 Jul-2019 Oct-2019 Jan-2020 Apr-2020 Jul-2020 Oct-2020 Dec-2020
Source: Bloomberg; data up to 31 Dec 2020; performance of the Credo Global Equity Class A Retail GBP since Inception 03 July 2017 5
Building our portfolio – stock attributes
▪ Affected in all aspects
(profitability and operations)
▪ Potential for binary outcomes
▪ Possible cashflow and
▪ Quality franchises
balance sheet issues
Risk ▪ Business models with
competitive advantage
▪ Temporary depressed by
▪ Resilient business models
quarantine measures
and balance sheets
▪ Stable compounding returns
▪ Positive or neutral impact
from COVID-19
Reward
6
Building our portfolio - diversified across names and ‘buckets’
Risk
Reward
7
Building our portfolio - how did our holdings change
9% 11%
48% Core 41%
Q3 2020 Q1 2021
Impacted but Quality
43% ICU 48%
Source: Bloomberg, allocation by Credo as at 30 Sept 2020 and 18 Jan 2021 8
How did our top holdings change accordingly
Less concentrated portfolio positioned for the recovery trade
Top 10 Holdings (%)
Q3 2020 Q1 2021
HCA Healthcare Inc 5.7 Raytheon Technologies Corp. 4.5
Flutter Entertainment plc 5.5 Flutter Entertainment plc 4.4
Alibaba Group Holding Ltd 5.4 Alibaba Group Holding Ltd 4.2
Facebook Inc 5.4 HCA Healthcare Inc 3.9
Microsoft Corp 5.1 Crown Resorts 3.9
The Walt Disney Company 4.0 Bayer AG 3.7
Becle SAB de CV 3.9 Frontdoor Inc 3.5
Progressive Corp 3.7 Cigna Corp 3.5
Cigna Corp 3.4 Wells Fargo & Co. 3.2
Frontdoor Inc 3.2 Prudential 3.2
Total 45.3% Total 38.0%
Source: Bloomberg, Credo as at 30 Sept 2020 and 18 Jan 2021 9How did our top holdings change accordingly
Less concentrated portfolio positioned for the recovery trade
Top 10 Holdings (%)
Q3 2020 Q1 2021
HCA Healthcare Inc 5.7 Raytheon Technologies Corp. 4.5
Flutter Entertainment plc 5.5 Flutter Entertainment plc 4.4
Alibaba Group Holding Ltd 5.4 Alibaba Group Holding Ltd 4.2
Facebook Inc 5.4 HCA Healthcare Inc 3.9
Microsoft Corp 5.1 Crown Resorts 3.9
The Walt Disney Company 4.0 Bayer AG 3.7
Becle SAB de CV 3.9 Frontdoor Inc 3.5
Progressive Corp 3.7 Cigna Corp 3.5
Cigna Corp 3.4 Wells Fargo & Co. 3.2
Frontdoor Inc 3.2 Prudential 3.2
Total 45.3% Total 38.0%
Source: Bloomberg, Credo as at 30 Sept 2020 and 18 Jan 2021 10How did our top holdings change accordingly
Less concentrated portfolio positioned for the recovery trade
Top 10 Holdings (%)
Raytheon Technologies Corp. 4.5
Flutter Entertainment plc 4.4
Alibaba Group Holding Ltd 4.2
HCA Healthcare Inc 3.9
Crown Resorts 3.9
Bayer AG 3.7
Frontdoor Inc 3.5
Cigna Corp 3.5
Wells Fargo & Co. 3.2
Prudential 3.2
Total 38.0%
Source: Bloomberg, Credo as at 18 Jan 2021 11Building our portfolio – recent new additions
Emphasis on recovery while being cognisant of value opportunities
12Where are we now?
Vaccine: Israel to be the blueprint for the rest of the world US Election: New administration ahead
Developed world: Still in lockdown, awaiting vaccines Yields: US Treasury yield steepened
13Outlook: Balancing Act
Positioned for the best, protected from the worst
New strains catch up to immunity
Vaccine is effective
14United Kingdom South Africa Jarrod Cahn Andrew Cormack jcahn@credogroup.com acormack@credogroup.com +44 (0)7800 508 983 +27 (0)11 463 6312
Important Notice
The information and opinions expressed in this presentation have been compiled from sources believed to be reliable. This presentation is subject to change without
notice, its accuracy is not guaranteed, it may be incomplete or condensed and it may not contain all material information concerning Credo Capital Limited (authorised
and regulated by the FCA in the UK) (Credo) and/or its UCITS Funds referred to in this presentation. Those Funds are regarded as Collective Investment Schemes in
Securities (CIS) and should be considered as medium to long-term investments. CISs are traded at the ruling price and can engage in scrip lending and borrowing
although none of the Funds do so.
A schedule of fees, charges and maximum commissions for the Funds is available on request from the Manager. A CIS may be closed to new investors in order for it to
be managed more efficiently in accordance with its mandate. Performance for the Funds is calculated using net NAV to NAV numbers with income reinvested. Full
performance calculations are available from the Manager on request. For any additional information such as MDDs, prospectus and supplements please go to
www.credogroup.com. None of Credo, its directors, officers or employees accepts liability for any loss arising from the use hereof or reliance hereon or for any act or
omission by any such person or makes any representations as to its accuracy and completeness. Any opinions, forecasts or estimates herein constitute a judgement as
at the date of this presentation. There can be no assurance that the future results or events will be consistent with any such opinions, forecasts or estimates. Investors
are warned that past performance is not necessarily a guide to future performance, income is not guaranteed, share prices may go up or down and you may not get
back the original capital invested. The value of your investment may also rise or fall due to changes in tax rates and rates of exchange if different to the currency in
which you measure your wealth.
Companies in the Credo Group and their respective directors, members, employees and members of their families may have positions in the securities or derivatives
thereof referred to in this presentation. No part of this presentation may be reproduced or distributed in any manner without the written permission of Credo.
Prescient Management Company (RF) (Pty) Ltd is the Representative Office in South Africa for the Credo Global Equity Fund. Boutique Collective Investments (RF)
(Pty) Ltd is the Management Company for the BCI Credo Global Equity Feeder Fund.
16credogroup.com
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