Old values shine at Scotland’s Kennox fund
Traditional long-only investing is the secret to strong returns, according to Edinburgh-based Kennox Strategic Value Fund, which holds just 25 stocks and 20% cash in its portfolio.
Kennox Asset Management is owned and run by a small team focused on outperformance of their single long-only global equity fund. The team comprises Investment director Charles L. Heenan (pictured) and Investment manager Geoff Legg, with Managing Director Peter Boyle and Non Executive Chairman Michael Adam.
All veterans of the investment industry themselves, they are scrutinised by an Advisory Board comprised of Peter Hollis, an ex Baillie Gifford manager and now principal at Hollis Capital, author and strategist Russell Napier, and First State Investments emerging markets manager Angus Tulloch.
“We wanted a small team but we also appreciate the external challenge that the Advisory Board provides,” said Boyle. “The managers are really being tested by highly regarded colleagues in the industry.”
Boyle says the structure of the firm and the fund is fully aligned with client interests, with all involved dedicated to the ethos of capital preservation and long term, long-only value investing.
The Kennox Strategic Value Fund has a distinctive philosophy and process that produces a highly differentiated portfolio of global equities. It combines quantitative screening and meticulous qualitative research that has delivered returns of 43% since inception in 2007, compared to the MSCI World Index, which produced just 6%.
Heenan says he spent 15 years thinking of how to shape the process, and the last five years practising it. The methodology is simple and repeatable, aiming to capture most of the upside in surging markets and protecting the portfolio in volatile times. Since 2007, over five periods of particular turbulence, the portfolio was down 22%, against the MSCI World loss of 65%.