Among the infinity of investment funds, it is normal for many to go through less known managers. Now, from time to time we find some that are especially good. This is the case ofl Sifter Global Fund.
It’s a Global Variable Income Fund of very high conviction. In fact, it always moves between 25-30 companies. The background has quite historical and bat in long term to the MCSI ACWI, which is not bad. Other data that have surprised me from the fund, at first glance, is the infra weighting in the United States (and continues to beat the index) with a weight of approximately 50%. And in Asia only present in Taiwan and Japan. Therefore, it is more complicated to achieve the profitability they obtain, which has a lot of merit. Although technology weigh, they barely have exposure to the magnificent 7 (I insist that, even so, it beats its index, although it is logical that in 2024 it has stayed behind), and its second sector is the industrial one. Further are the health and communication services sector.
Fuente: Morningstar Direct
One of the characteristics that the manager seeks in companies is the visible recurrence of income. That is why they select Costco in front of other companies in the sector. The difficulty of establishing a regular fee makes this chain a very high income predictability. Walmart tried this policy without success.
In the industrial part they have other companies whose cash flows are quite predictable in an important amount. The manager told me that some of his companies in portfolio sell, verbigracia, engines, with a 10 -year maintenance service, which represents 35% of the company’s revenues. Imagine a company (Safran is what they have in the portfolio) that has 15 clients with whom it has 10 years contracts and that represents 35% of the income. It is a real bargain. Another of the companies that see with potential mocho is Novo Nordisk.
When one of the companies they have in the portfolio (always in the long term) loses its competitive advantage, they reduce its weight to place it in the last positions of the portfolio until they decide to take it out. It was the case of IBM at the time. This weighting ranking according to conviction is very useful, because it allows them to monitor more those that, being conviction, see them danger. Another of the advantages of this long term in investments is that they do not care for short -term volatility. The analysts and the manager have their heritage at the bottom and told me the manager who goes on vacation very quiet. That an event happens in summer that makes an action fall does not care because the business model does not change and the market ends up putting that value in price. Another thing would be a punctual event as if China invades Taiwan. Obviously there I would take the position in Taiwan semiconductor. This vision causes the background to have a volatility somewhat higher than its reference index, but a much larger income visibility and a medium of the 29 portfolio compared to 37 of American technology.
Fuente: Morningstar Direct