Not all the news from Spain’s financial sector is downbeat. Family-backed firm March Gestión de Fondos is pushing out across Europe.
Diverse asset classes
The portfolio is constructed across diverse asset classes to minimise market risk and is not limited by geographic area, sector or financial instrument. Fixed income holdings provide stability and yield, with a maximum of 5% per issuer in each portfolio, while the 20-60 equity holdings are continuously screened, but bought with medium- to long-term investment horizons. “The cash position is on average 10% but could be 100% if conditions warrant it,” explains Jiménez. “We do not use financial leverage – derivatives are only used to hedge portfolios or specific investments. This is not a hedge fund.”
Fixed income holdings at the moment are in public or corporate debt and the portfolio has been reducing duration over the past year.
It now holds no instruments with a maturity of more than five years. Global equity stocks tend to have Betas lower than the market, and over the past two quarters the fund has had a lower equity weighting than its historic norm.
Another fund to be offered more widely this year is the €55m Vina Catena fund, a global fund investing exclusively in wine-related stocks. Investing in fine wine has been regarded as a profitable, but niche opportunity for mainly high net worth investors.
But Jiménez says institutions are highly interested in a fund that outperforms its benchmark consistently, with volatility just half that of a global equity fund, and offering low correlation with most other asset classes.
The original Spanish share class was launched in 2009, with the Luxembourg one a year later. The managers are Francisco Javier Pérez Fernández and José Antonio Méndez, both with backgrounds in equity analysis.
There is a growing global trend in favour of good-quality wine and companies operating in the value chain are enjoying strong growth in sales and are maintaining high margins. Imports have rocketed recently thanks to growing demand in emerging markets and new markets.
Historically, the risk/return profile of the beverages sector has been much more attractive than the MSCI World index.
Investment is via companies which have an attractive valuation, are well positioned, or have a competitive edge, and whose fundamentals remain solid over long periods.
The managers do not follow a benchmark or any set limits in terms of sector or geographical weights. Companies are selected only once the team has gone through a rigorous process of fundamental analysis.
“As value stock pickers, we are very aware of what we pay for,” says Jiménez.
The investment process is informed by the fund’s four-strong advisory board, comprised of experts from different disciplines within the wine world (see box, opposite).
The input from the board complements the managers’ knowledge and helps identify trends, innovation, advantages and investment ideas. It meets quarterly with the MGF investment team.